The Luna Foundation Guard has raised $1.5 billion in bitcoin to strengthen its reserves of U.S. Terra, its most popular stablecoin. The firm acquired 37,863 BTC through over-the-counter swaps with the help of Three Arrows Capital and Genesis Trading.
Reaching its $10M Goal
The total amount raised, $500 million, came through a purchase from Three Arrows Capital and a $1 billion over-the-counter deal with Genesis. Hence, LFG has become one of the world’s top-10 holders, with a current reserve of $3.5 billion in BTC.
The acquisition of the UST Bitcoin Fund by the LFG is a significant step for the organization. It will allow it to continue accumulating large amounts of Bitcoin. The function of the pool is to support the TerraUSD (UST) stablecoin peg. It also aimed to expand UST’s adoption as the industry’s largest decentralized stablecoin.
According to Do Kwon, the founder of Terraform Labs, the organization’s goal of reaching $10 billion in assets will most likely be met by the end of the third quarter.
“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.”
Despite the lack of evidence supporting the effectiveness of the monetary policy, Kwon believes that it is symbolic of how society is currently in a state of over-printing. He also noted that citizens are trying to bring back a sounder monetary system.
Investors are Getting into Crypto
According to Joel Kruger, a crypto analyst for LMAX Group, the increasing number of corporate investors can significantly affect the value of bitcoin. He noted that this type of buying can also provide investors with long-term interest and liquidity.
Aside from Luna Foundation Guard, other companies also make high-profile Bitcoin purchases. MicroStrategy, a publicly-traded company, added 4,197 BTC to its April reserves, totaling 129,218 BTC.
In 2020, MicroStrategy became the first company to invest its assets in cryptocurrencies, believing it would provide a better long-term investment than the US dollar. According to the company, investing in Bitcoin would allow them to hedge against inflation and earn a higher return.
Tesla, the electric vehicle manufacturer, also revealed in a regulatory filing that it had invested around $1.4 billion in Bitcoin. The company’s 42,902 Bitcoin units are currently worth over $2 billion. Galaxy Digital Holdings, a merchant bank that focuses on the crypto industry, holds over 16,400 Bitcoin units.
Terra is Recovering
Over the past four weeks, the price of Terra (LUNA) has lost over 30%. Despite its impressive performance, it is still struggling to maintain its current level of support at $85. On April 18, the Terra stablecoin became the third-largest stablecoin globally after it flipped over to the US dollar from the BUSD.
On April 26, Fireblocks saw over $250 million in institutional investor funds enter the Terra DeFi ecosystem. Despite the positive newsflow, investors remained cautious about investing in the stablecoin.
The number of Terra’s decentralized applications has increased by over 40% over the past month. The network’s total value locked reached an all-time high of 254 million units.
The total amount of deposits made by Terra’s Dapp in 2022 reached $21.2 billion, a 77% increase from the previous year. The TVL of Binance Chain’s Dapp, which is a scaling solution, is currently at $9.8 billion, a 9% increase from the previous year.