LFG has purchased around 30,727.979 bitcoin, which is worth about $1.45 billion at current prices, to establish a reserve for Terra network stablecoin UST.
According to on-chain analytics, Luna Foundation Guard (LFG) purchased 24,954.96 BTC worth about $1.12 billion within the past two weeks to establish a bitcoin reserve to back its stablecoin, TerraUSD (UST).
While many in the Bitcoin community were quick to point out that the project is fundamentally different from others based on on-chain bitcoin, such a significant BTC buy had an undeniable impact on the Bitcoin ecosystem and, quite possibly, the price.
However, the narrative isn’t just favoring Bitcoin as LFG speeds up their BTC purchases; the sentiment has also shifted and fueled the surge of Terra network native token LUNA.
LUNA continues to outperform its rivals, with the token’s price jumping to $111.52 on Wednesday morning, surpassing the previous all-time high of $104.83 set earlier this month.
LFG is a non-profit organization established in Singapore that attempts to boost demand for Terra’s stablecoins in order to “bolster the UST peg’s stability and assist the expansion of the Terra ecosystem.”
The long-term prospects of its LUNA tokens, on the other hand, are largely dependent on a combination of the overall viability of algorithmic stablecoins versus collateral-based alternatives, the dynamics of the crypto market, and the availability of reserves to support UST’s stability and long-term growth.
Late last month, the Luna Foundation Guard announced that it had raised $1 billion from crypto-focused venture investors for this reason, exposing the plan to build a Bitcoin reserve for Terra’s UST stablecoin. Terra’s LUNA tokens were privately sold to raise money.
Terra token’s market capitalization has increased to $39.35 billion, accounting for 1.82 percent of the entire crypto market, up from 0.39 percent at the beginning of the year.
The LUNA Foundation Guard (LFG) plans to boost its Bitcoin reserves to $3 billion, with a long-term objective of growing the pool to $10 billion, which might result in a surge in UST demand, driving more LUNA tokens out of active production permanently.