Bitcoin Address that Deposited More than $1 Billion May Be Connected to Luna Foundation
The latest transaction made by the BTC address bc1q9d4ywgfnd8h43da5tpcxcn6ajv590cg6d3tg6axemvljvt2k76zs50tv4q has allowed exceeding the balance of $1 billion, while most analysts attribute it to the Luna Foundation’s owners.
What is Known about the Mysterious BTC Address So Far
According to BitInfoCharts, after the latest transaction made on March 26th, 2022, the analyzed address’ balance has reached 24,954.95 BTC that is about $1.11 billion. The entire cycle of transactions that enabled accumulating included 45 transactions starting from January 21st, 2022.
The BTC address bc1q9d4ywgfnd8h43da5tpcxcn6ajv590cg6d3tg6axemvljvt2k76zs50tv4q has the 33rd rank overall by the amount of BTC held. Considering the high rates of BTC accumulation and the unprecedented amount controlled by the unknown whale, most analysts suggest that it can be attributed to the Luna Foundation.
As it is known that the organization has raised about $2.2 billion of its crypto reserves recently, it is very likely that it has used this address for accumulating these crypto assets and using them for effectively supporting its future plans and business initiatives.
The following monitoring of this address’ BTC transactions and the balance dynamics may allow supporting or disproving such initial expectations. In any case, the crypto analysts’ attention to the Luna Foundation’s initiatives may continue to increase in the following weeks.
Luna Foundation’s Fundraising Initiatives
The Luna Foundation has activated its fundraising plans in February, following the announcement of new initiatives regarding raising the equivalent of several billions USD in crypto as a way to support its UST stablecoin.
The organization offers its LUNA tokens from Terra’s ecosystem as a strategy for attracting additional funding and supporting its stablecoin projects. The UST stablecoin is positively perceived by most investors as it relies on innovative algorithms for adjusting the amount of UST based on the exchange rates between BTC and USD. Terra has proven its algorithmic and business stability as compared with alternative projects.
Moreover, Terra’s token LUNA also demonstrates high rates of market appreciation, thus creating additional opportunities for generating high returns that significantly exceed the average rates of the crypto market appreciation.
As a result, both the Luna Foundation and its investors can significantly benefit from the development of the UST and LUNA initiatives. The growing number of investors tend to become more critical of Tether and other types of stablecoins based on collateral.
The Luna Foundation currently holds a collateral of about $2.2 billion in a form of non-LUNA reserves as well as 8 million Terra coins that may be used for future business expansion. The current amount of reserves accumulated by the Luna Foundation should be sufficient for maintaining the stability of its stablecoin even during “crypto winters” and other external shocks in the crypto market.
Terra’s Future and Implications for the Crypto Market
The Luna Foundation has successfully established its status as one of the most innovative platforms that integrates both traditional cryptocurrencies and stablecoins.
However, the long-term prospects of its LUNA tokens largely depend on the combination of the following major factors: the overall sustainability of algorithmic stablecoins as compared with collateral-based alternatives; the dynamics of the crypto market (especially the BTC price dynamics); and the sufficiency of reserves for supporting the stability of UST and sustainable growth of LUNA.
Some critics of Terra’s ecosystem still claim that the organization may be unable to effectively maintain its operations if the capitalization of the crypto market starts to decline rapidly. However, the available statistics demonstrates that Terra is comparatively effective in applying its algorithms for fulfilling all UST coverage requirements and providing its LUNA holders with high passive income (about 8.5% per year).
About 40% of LUNA tokens are currently used for staking, confirming the high level of support among investors.
LUNA’s short-term price dynamics illustrates the sustainable growth with the accumulation of additional reserves and potential for capitalization maximization in the following weeks.
Figure 1. LUNA/USD Price Dynamics (1-Month); Data source – CoinMarketCap
The strong support levels at the price of $77 and $88 effectively prevent LUNA’s price from significantly declining in the near future. LUNA still faces some resistance at the price levels of $96 and $104, but the overall positive trend makes it highly likely to continue the token’s stable appreciation in the future.
Terra’s success can facilitate the spread of algorithmic stablecoins in the crypto industry as well as the closer integration of traditional cryptocurrencies and stablecoins as in the case of LUNA and UST.
