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Luna Foundation "Sells" $1.5 Billion in Bitcoin Bought at $47,000 for $33,000: Details

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Mon, 05/09/2022 - 08:21
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Arman Shirinyan
While foundation has not announced the sale, there is no other way to support UST stablecoin
Luna Foundation "Sells" $1.5 Billion in Bitcoin Bought at $47,000 for $33,000: Details
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Luna Foundation Guard responsible for the stability of the UST stablecoin powered by Terra and its lead Do Kwon announced a "lend" to market makers designed to defend the peg of the stablecoin.

While Do Kwon has not specifically mentioned what will happen with the provided funds, it is more likely that the "lend" to market makers looks more like a massive sell order. The foundation will use the proceeds from buying back the UST that lost its peg for a ‌moment on the weekend.

Terra community members expressed their frustration with the situation that emerged around the stablecoin. LFG transacted $1.5 billion of its total Bitcoin holdings, which is essentially more than half of the total collateral right at the market bottom, which does not need additional selling pressure.

Other users accused Do Kwon of a lack of transparency while deciding to affect all UST holders and demand more information and further explanation. But the co-founder of Terra argued that during situations like witnessed yesterday, speed is the key, and he decided based on the interest of the foundation and UST holders.

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Following the market turmoil and rapid drop of BTC, the panic on the cryptocurrency market emerged, causing a massive outflow of liquidity from the UST stablecoin, which then led to the de-pegging, and the price of the stablecoin plunged below $1.

On May 8, Bitcoin plunged to $33,563, which was expected by most Bitcoin bears like Peter Schiff, who expects the aggravation of market turmoil if the first cryptocurrency somehow plunges below $35,000.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.