The Luna Foundation Guard Bought Another $1.5 Billion Worth of Bitcoin
LFG raised the cash through a $1 billion over-the-counter (OTC) swap with cryptocurrency broker Genesis and a $500 million bitcoin acquisition from hedge fund manager Three Arrows Capital, according to CNBC on Thursday (May 5, 2022).
LFG paid $100 million for BTC in April. The UST algorithmic stablecoin reserve now has roughly $3.5 billion in bitcoin, making it one of the top ten bitcoin holdings in the world.
Do Kwon, the co-founder and CEO of Terraform Labs, announced plans to raise $10 billion in BTC as collateral for UST in March. Do Kwon intends to reach this target by the end of the third quarter of 2022.
According to a statement from Do Kwon:
"For the first time, you're starting to see a pegged currency attempting to observe the bitcoin standard. It's making a strong directional bet that keeping a lot of those foreign reserves in the form of a digital native currency will be a winning recipe."
Large institutional purchases and cryptocurrency swings
The price of bitcoin fell 9.1 per cent on Thursday. Luna, the Terra blockchain's governance token, fell 7.3 per cent. The changes coincided with a general and rapid decrease in stock prices.
The last time the Luna Foundation Guard purchased $1 billion in bitcoin, bitcoin had surpassed $48,000 for the first time since December 31, and luna had reached a new high.
The partners in this newest acquisition are on a mission to bridge the gap between traditional banking and crypto native platforms and protocols and padding their reserves.