Terra’s Luna Foundation Guard (LFG) just bought $1.5 billion in bitcoin for its TerraUSD (UST) stablecoin reserves. Following this, Terra’s BTC holdings nearly doubled from 42,530.82 BTC up to 80,394 BTC, accounting for over $2.9 billion worth of total bitcoin reserves. This further made Terra the second-largest BTC holder, even surpassing Tesla’s BTC portfolio which only amounts to $1.5 billion in bitcoin.
The exclusive BTC deal was facilitated via an over-the-counter (OTC) swap where LFG offered 1 billion UST for $1 billion worth of BTC. While the $1 billion OTC swap was with Genesis, LFG also purchased an additional $500 million worth of BTC via Three Arrows Capital (3AC), further pushing the LFG into one of the top 10 holders of BTC.
Terra Aims To Reach $10 Billion In BTC Reserves
Terraform Labs’ CEO Do Kwon expects the non-profit’s BTC holdings to reach the $10 billion by the end of the third quarter. He believes that backing Terra’s UDT stablecoin reserves with BTC will allow for the token to maintain long-term price stability.
Kwon noted that “for the first time, you’re starting to see a pegged currency that is attempting to observe the bitcoin standard”. He added how “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.”
Last month, LFG bought 2,508.94 bitcoin, amounting to nearly $100 million, at the time of settlement. Following this, the LFG wallet ranked as the 18th largest bitcoin wallet according to the bitcoin rich list after that purchase, accounting for LFG’s total BTC reserves being worth $1.79 billion.
While LFG’s exclusive BTC purchase almost doubled the company’s BTC portfolio, the trading price of the dominant cryptocurrency fell by over 8% in the past 24 hours. At press time, BTC was trading slightly above $36,000 with a market cap of $691 billion.