About $1.4 billion worth of Bitcoin (BTC) reportedly moved from the Luna Foundation Guard (LFG)-linked wallet on Monday, raising questions about its ultimate fate on a day when the price of Bitcoin is down more than 11%.
Data from blockchain explorer Blockchair revealed on Monday that 42,530.82827771 BTC was spent from the LFG wallet, although its whereabouts are unknown. It has been speculated that the funds were split into two parts – approximately 12,500 BTC and 30,000 BTC, respectively – with one part sent to cryptocurrency exchange OKEX.
looks like they have split it up the funds 12.5k and 30k BTC going separate ways.
Supposedly a chunk has been sent to OKEX as well pic.twitter.com/hlZtmMDcT5
— Daxx (@DaxxTrader) May 9, 2022
Around the same time, the Twitter account Whale Alert revealed that 12,531 BTC had been transferred from an unknown wallet to another unknown wallet. Whale Alert offers a tracker and analytics with reports on large Bitcoin transactions.
12,531 #BTC (384,431,740 USD) transferred from unknown wallet to unknown wallethttps://t.co/4ZuCN34Fnr
— Whale Alert (@whale_alert) May 9, 2022
The move came less than a day after the LFG announced that it was taking decisive action to “proactively defend the stability of the UST bond [y] the broader Terra economy,” referring to its popular algorithmic stablecoin TerraUSD, which fell below its 1-to-1 ratio to the US dollar. The measures included lending $750 million of BTC to over-the-counter trading firms to help protect the UST peg and lending 750 million UST to accumulate more Bitcoin when market conditions begin to stabilize.
1/ Over the past several days, market volatility across crypto assets has been significant.
The market turmoil is also reflected by the past week’s uncertain macro conditions across legacy asset classes.
— LFG | Luna Foundation Guard (@LFG_org) May 9, 2022
UST hit a low of $0.9428 on Monday, according to data from CoinMarketCap.
The value of Terra (LUNA) also fell significantly over the weekend, although the project’s co-founder, Do Kwon warned that the sale was the result of a coordinated attack on the protocol. He also clarified on Sunday that the LFG “is not trying to get out of its position in Bitcoin” but rather was putting the capital in the hands of a professional market maker to buy UST if the price falls below the dollar peg and buy BTC if the price falls below the dollar peg. was greater than or equal to the dollar peg.
2/ First, *LFG is not trying to exit its bitcoin position*.
The goal is to have this capital in the hands of a professional market maker such that:
1) Buy UST if price 2) Buy BTC if price >= peg
thus significantly strengthening the liquidity around UST peg
— Do Kwon (@stablekwon) May 9, 2022
On Monday, Kwon also tweeted that it was going to “deploy more capital”, although it did not specify to what extent.
The extreme market volatility follows the LFG’s acquisition of $1.5 billion worth of Bitcoin, completed last week through over-the-counter trading with Genesis Trading and direct purchases from cryptocurrency hedge fund Three Arrows Capital. At the time, the non-profit organization was said to hold about $3.5 billion worth of BTC at an average price of about $37,100 per coin. BTC price hit a low of around $30,300 on Monday, according to data from Cointelegraph Markets Pro and TradingView.
This is a developing story and could be updated as more details become available.
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