- Luna Foundation Guard added another 37,863 ($1.5 billion) Bitcoin purchase to its reserves.
- The foundation now has a total of 80,394 Bitcoin reserves.
- “You’re starting to see a pegged currency that is attempting to observe the bitcoin standard,” said Terra co-founder Do Kwon.
Luna Foundation Guard (LFG) has acquired its largest Bitcoin purchase of 37,863 coins, a whopping $1.5 billion at the time of purchase.
The recent move by the LFG has doubled their previous reserves, from 42,530.82 up to 80,394 Bitcoin reserves. According to the tweet, the group assisted the purchase by exchanging $1 billion in UST stablecoin for Bitcoin using Genesis Trading and a $500 million over-the-counter purchase with the assistance from Three Arrows Capital.
The purchase puts Terra’s reserves at approximately $3.5 billion. Large portion of their reserves is in Bitcoin, while LUNA, AVAX, USDT, and USDC hold smaller shares.
The purpose of the reserve is to lay out backing for TerraUSD (UST) stablecoin. TerraUSD is an algorithmic stablecoin; it obtains its value from its relationship to Terra’s floating-value cryptocurrency—LUNA. It is the third-most-valuable stablecoin in the market, following USDT and USDC stablecoins.
Do Kwon, Terra’s co-founder, anticipated that the transition to Bitcoin backing serves in the best interest of UST’s long-term price stability.
According to CNBC, 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.”
Kwon recently shared that Terra is expected to raise reserves of up to $10 billion by the end of the third quarter. Also, Terra is one of the top 10 Bitcoin holders in the world with their current holdings alone. LFG is still waiting for an updated figure of the reserves to be displayed.
Despite its Bitcoin purchase, the price of BTC still went down following Wednesday’s Federal Reserve meeting.
