The Luna Foundation Guard completed a $1 billion OTC swap with crypto prime broker Genesis Global Trading and the remaining $500 million worth of Bitcoins from crypto hedge fund Three Arrows Capital.
On Thursday, May 5, the Luna Foundation Guard announced its purchase of $1.5 billion worth of Bitcoins. The fresh purchase will help LFG to bolster the reserves for the UST stablecoin. TerraUSD (UST) is the native stablecoin of Terraform Labs. It has now reached the list of top ten digital assets with a market cap of $18.6 billion.
Luna Foundation Buys Additional Bitcoins
The Luna Foundation Guard has announced that it shall be purchasing a total of $10 billion in Bitcoins as reserves for its UST stablecoins. The latest purchase just brings them closer to their goal. Do Kwon, co-founder and CEO of Terraform Labs said that he expects to reach this goal by the end of Q3 2022.
During the latest Bitcoins acquisition, the Luna Foundation Guard completed a $1billion OTC swap with crypto prime broker Genesis against $1billion in UST payments. Then it purchased the rest of $500 million worth of Bitcoins from crypto hedge fund Three Arrows Capital. Speaking of the development, Kwon said:
“For the first time, you’re starting to see a pegged currency that is 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 is going to be a winning recipe.”
“The jury’s still out on the effectiveness on the subject, but I think it is symbolic in the sense now that we live in a time where there’s excess money printing across the board and when monetary policies highly politicized that there are citizens that are self-organizing to try to bring systems back to a sounder paradigm of money,” added he.
The Rise of Terra LUNA
Terra’s native cryptocurrency LUNA has witnessed a strong rally with its price surging past $100 for the first time in December 2021. The decision to back its UST stablecoin with Bitcoin reserves has given more strength to the project. The Luna Foundation Guard purchased its first Bitcoins in December 2021 when BTC was trading for around $48,000.
By entering into a recent transaction with LFG, Genesis is building its reserves in LUNA and UST. It will further use these reserves to interact with other borrowing counterparties. The deal also allows Terra to distribute Terra assets to counterparties facing difficulty to accept them on exchange. Josh Lim, head of derivatives at Genesis Global Trading said:
“There’s traditionally been this gulf between where crypto native market participants are participating and Terra is on the far end of that, it’s designed by crypto-native people for crypto-native people. Because we’re more of an institutional counterparty that they’re familiar with – trading with more on the spot, OTC side of things – we’re able to source this in large size and then parcel it out to people”.
Read other crypto news on our website.
next