The Luna Foundation has gotten its hands on $1.5 billion in bitcoin to boost the reserves of U.S. Terra, its most popular stable currency.
Luna Gets Its Hands on a Lotta Bitcoin
Do Kwon – the co-founder and CEO of Terraform Labs, the group that launched the Terra blockchain – says that by the end of September, he expects to garner as much as $10 billion in new funding through BTC. He commented in an interview:
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 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.
At the time of writing, Luna now holds more than $3.5 billion in crypto. It is amongst the top ten largest bitcoin holders in the world. It also holds more than $100 million in Avalanche – another altcoin – and U.S. Terra has joined the top ten cryptocurrencies by market cap.
This is the second time in a row the company purchases more than $1 billion in BTC, the previous time occurring earlier in the year. At the time, bitcoin was trading for around $48,000 and Luna hit an all-time high. By contrast, bitcoin – this time around – is trading for around $35,000, having recently taken a dip into rather low territory.
Joel Kruger – market strategist for LMAX Group – commented:
The corporate buying of bitcoin can greatly influence the value of the currency and the space itself. With more demand from institutions comes added liquidity and longer-term interest, while validating the asset class at the same time.
Terra Has Taken a Huge Step
Josh Lim – head of derivatives at Genesis Global Trading – also threw his two cents into the mix, saying:
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. There’s another corner of the market that’s mostly institutional. They’re still waiting on things like buying bitcoin, inserting it in cold storage, or doing CME futures on bitcoin. They’re very disjointed parts of the market, and Genesis is trying to bridge that gap and allow more institutional capital to come into the competitive world… Because we’re more of an institutional counterparty 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.