Luna Foundation Guard Is Now Selling All Of Its Bitcoins To Save UST Peg! What Is Happening?
Luna Foundation Guard Is Now Selling All Of Its Bitcoin To Save UST Peg
The most concerning event for the crypto market happened when the Terra ecosystem’s stablecoin UST was de-pegged from the $1 price level, while Bitcoin continued to drop below $ 30,000.
Following the de-peg of UST on May 8, which caused the stablecoin’s price to plummet to $0.9853, Terraform Labs and the Luna Foundation Guard (LFG) hedge fund have made a number of significant actions to quickly recover UST’s price balance.
LFG said at midday on May 10 that it will spend 1.5 billion dollars from the fund (including 750 million dollars in Bitcoin and 750 million dollars in USD) to help protect the UST peg. In essence, Luna Foundation Guard is “selling Bitcoin” to lower the supply of UST in the market, forcing the stablecoin price to rise again. The organization promises to use the accumulated UST to buy back Bitcoin once the UST reaches the $1 milestone.
LFG said before daybreak on May 10 that it has paid a further 37,000 BTC (almost $1.1 billion) to save the price of UST. The fund’s Bitcoin reserves are currently little over 28,200 BTC (worth roughly $854 million), a far drop from the $3 billion in Bitcoin it had just a few days ago.
When the UST de-pegged again on the evening of May 9, falling to $0.98, all of Luna Foundation Guard’s actions did not have the expected impact. The UST has bottomed out at $0.605, down 40% from the $1 that it should have maintained after a long struggle.
At 08:30 a.m. (Asian time), Twitter users saw that Luna Foundation Guard had moved the remaining BTC in the wallet to the Binance exchange, thereby emptying the fund’s BTC wallet.
The price of LUNA has dropped dramatically in the last 12 hours, losing approximately 60% of its worth to only $26.54.
Meanwhile, the amount of UST placed on the Anchor Protocol lending protocol – which is at the core of the Terra ecosystem when it offers 18% APY interest – has “evaporated” over 50%Â from $14 billion on May 8th to only $6.8 billion at the time of writing. Anchor’s APY increased by 20% because to the massive withdrawal of UST by users.
Terra’s TVL is down about 50%, according to DeFi Llama, and now stands at just $11.93 billion, a very far contrast from its peak of $31 billion in early April.
Not only that, but the sale of Bitcoin by Luna Foundation Guard has sparked market fear, putting pressure on the world’s largest cryptocurrency, which has had to “stretch” in the past due to reports that the Fed had hiked interest rates and world stocks were on fire.
As a result, from a high of $33,000 on May 9, Bitcoin price dropped to $29,730 on May 10 — a new low for 2022 and the lowest value since mid-July 2021. BTC has now fallen below MicroStrategy’s DCA price, one of the “whales” owning the most Bitcoin.
Binance exchange announced at 10:35 a.m. (Asian time) on May 10 that it is suspending all Terra network withdrawals due to severe congestion, most likely due to users massively withdrawing LUNA and UST.
“Withdrawals for LUNA and UST tokens on the Terra (LUNA) network were temporarily suspended on 2022-05-10 at 02:20 AM (UTC) due to a high volume of pending withdrawal transactions. This is caused by network slowness and congestion,” Binance stated.
El Salvador’s President, Nayib Bukele, announced that his country has decided to purchase another 500 bitcoins for $30,700. However, El Salvador’s earlier Bitcoin investments have all been losses.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
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Hazel
CoinCu News
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Luna Foundation Guard Is Now Selling All Of Its Bitcoin To Save UST Peg
The most concerning event for the crypto market happened when the Terra ecosystem’s stablecoin UST was de-pegged from the $1 price level, while Bitcoin continued to drop below $ 30,000.
Following the de-peg of UST on May 8, which caused the stablecoin’s price to plummet to $0.9853, Terraform Labs and the Luna Foundation Guard (LFG) hedge fund have made a number of significant actions to quickly recover UST’s price balance.
LFG said at midday on May 10 that it will spend 1.5 billion dollars from the fund (including 750 million dollars in Bitcoin and 750 million dollars in USD) to help protect the UST peg. In essence, Luna Foundation Guard is “selling Bitcoin” to lower the supply of UST in the market, forcing the stablecoin price to rise again. The organization promises to use the accumulated UST to buy back Bitcoin once the UST reaches the $1 milestone.
LFG said before daybreak on May 10 that it has paid a further 37,000 BTC (almost $1.1 billion) to save the price of UST. The fund’s Bitcoin reserves are currently little over 28,200 BTC (worth roughly $854 million), a far drop from the $3 billion in Bitcoin it had just a few days ago.
When the UST de-pegged again on the evening of May 9, falling to $0.98, all of Luna Foundation Guard’s actions did not have the expected impact. The UST has bottomed out at $0.605, down 40% from the $1 that it should have maintained after a long struggle.
At 08:30 a.m. (Asian time), Twitter users saw that Luna Foundation Guard had moved the remaining BTC in the wallet to the Binance exchange, thereby emptying the fund’s BTC wallet.
The price of LUNA has dropped dramatically in the last 12 hours, losing approximately 60% of its worth to only $26.54.
Meanwhile, the amount of UST placed on the Anchor Protocol lending protocol – which is at the core of the Terra ecosystem when it offers 18% APY interest – has “evaporated” over 50%Â from $14 billion on May 8th to only $6.8 billion at the time of writing. Anchor’s APY increased by 20% because to the massive withdrawal of UST by users.
Terra’s TVL is down about 50%, according to DeFi Llama, and now stands at just $11.93 billion, a very far contrast from its peak of $31 billion in early April.
Not only that, but the sale of Bitcoin by Luna Foundation Guard has sparked market fear, putting pressure on the world’s largest cryptocurrency, which has had to “stretch” in the past due to reports that the Fed had hiked interest rates and world stocks were on fire.
As a result, from a high of $33,000 on May 9, Bitcoin price dropped to $29,730 on May 10 — a new low for 2022 and the lowest value since mid-July 2021. BTC has now fallen below MicroStrategy’s DCA price, one of the “whales” owning the most Bitcoin.
Binance exchange announced at 10:35 a.m. (Asian time) on May 10 that it is suspending all Terra network withdrawals due to severe congestion, most likely due to users massively withdrawing LUNA and UST.
“Withdrawals for LUNA and UST tokens on the Terra (LUNA) network were temporarily suspended on 2022-05-10 at 02:20 AM (UTC) due to a high volume of pending withdrawal transactions. This is caused by network slowness and congestion,” Binance stated.
El Salvador’s President, Nayib Bukele, announced that his country has decided to purchase another 500 bitcoins for $30,700. However, El Salvador’s earlier Bitcoin investments have all been losses.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Hazel
CoinCu News
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