More than 50% of European families have some investment in digital currency. The average European family sees crypto as a viable investment and savings option. This was discovered in several recent surveys conducted over different demographic areas. Despite the volatility of the crypto space, as recent events highlight, it has seen a continuous rise in new investors. More people are committing to crypto investments and many of them are taking steps to buy into the growing market. The flurry…
On Monday, the Luna Foundation Guard (LFG) temporarily emptied its entire Bitcoin wallet of 42,530.82 BTC. Due to crypto market volatility, the foundation says it’s trying to preserve TerraUSD (UST)’s peg to the dollar.
According to on-chain data, the LFG’s Bitcoin wallet sent out all of its Bitcoin at 14:34 EST, only to recover 28,205 BTC just 2 hours later.
- Terra co-founder Do Kwon explained yesterday that the Guard voted to deploy $1.5 billion from its reserves to maintain UST’s stability. That includes $750 million BTC for buying UST when its price deviates below a dollar and vice versa.
- The stablecoin is currently way off its peg, trading at $0.87 at the time of writing. That means Terra needs to sell some of its Bitcoin holdings into an already soft market to defend UST’s value.
- Currently, UST is algorithmically backed by Terra (LUNA). However, the coin fell below its dollar value on this weekend after a whale holder dumped $285 million of UST on the market.
- The bearish crypto market compounded Terra’s stablecoin woes, bringing the value of its Bitcoin reserves down 9.1% within 24h. LUNA is currently in worse shape, down 33% on the day.
- Furthermore, with the stablecoin having deviated from its peg on the market, traders are incentivized to redeem their UST for Terra. While this helps protect UST’s value from further collapse, it exacerbates the fall of LUNA.
Fears are also circulating that Bitcoin could see a greater downside as the LFG begins selling coins to buy up UST. However, Do Kwon states that Bitcoin is highly liquid and that trades of their size cannot move the market.