As part of the reserve strategy, Luna Foundation Guard has acquired 38,000 BTC. This acquisition is equivalent to $1.5 billion. The goal of this acquisition is to backstop the algorithmic stablecoin of Terra Luna, the UST.
The main reason for raising a fund of $1.5 billion is to expand the hefty Bitcoin reserves of the Luna Foundation Guard (LFG). As per the record, LFG is a nonprofit based in Singapore, which is linked to the Terra Luna ecosystem.
Diving Into the LFG Acquisition
LFG was able to acquire 37,863 BTC through over-the-counter (OTC) swaps. These swaps were done with the broker Genesis Trading and another buying from a leading crypto company called Three Arrows Capital. In order to complete this acquisition, the deal was to swap $1 billion OTC with Genesis in exchange for $1 billion in UST. The deal also included a $500 million BTC purchase from Three Arrows firm. In accordance, this contract was finalized on Thursday.
Currently, the holdings of LFG reach $3.5 billion worth of BTC. As a result of this, according to CNBC, LFG is listed among the top-10 holders on a global scale.
— LFG | Luna Foundation Guard (@LFG_org) May 5, 2022
Luna Foundation Guard Closer to Its Goal
The goal of LFG is to collect roughly $10 billion in Bitcoin. The main reason for this purchase is to be able to back algorithmic stablecoin U.S. Terra, otherwise known as UST. Previously, in March, LFG bought $139 million worth of BTC. This purchase was made months after the firm showed its interest in collecting high amounts of digital assets.
Correspondingly, the CEO of Terraform Labs, Do Kwon, emphasized his goal. Kwon noted that he wants to establish a BTC reserve. The idea is to compete with that of Satoshi Nakamoto. Nakamoto is the digital asset’s pseudonymous creator.
Just getting started 😉 pic.twitter.com/dJrkf6YfrR
— TerraLunaaaa 🌖 (@TerraLunaaaa) March 30, 2022
One of the most popular algorithmic stablecoin is UST. Data from CoinMarketCap reveals that its market capitalization is more than $18.6 billion. Meanwhile, the other two stablecoins that reach higher market value are Tether (USDT), and USD Coin (USDC).
Besides LFG making high BTC purchases, another company takes part in this activity too. A publicly-traded firm called MicroStrategy is following the same path as LFG. It seems like the fluctuation of BTC’s price is not affecting its purchases. Henceforth, in April MicroStrategy accumulated 4,197 BTC in its reserve funds. Given these purchases, the company has a total holding of 129,218 BTC.