Terra’s Luna Foundation Guard continues to grow its bitcoin reserves, but its recent purchases have failed to move the market.
Terraform Labs co-founder Do Kwon announced on Twitter that the Luna Foundation Guard (LFG) nonprofit has purchased another $100 million worth of bitcoin.
LFG’s bitcoin wallet currently holds 42,406 coins with a total value of $1.7 billion.
As U.Today reports, Terra made its last purchase of $176 million on Sunday.
In late February, the foundation named Agile managed to raise $1 billion through a private sale of native LUNA tokens from investors such as 3AC and Jump Crypto. This made it possible to establish a massive bitcoin-denominated reserve to maintain the dollar peg of the native UST stablecoin.
Unlike Tether (USDT) and Circle’s USD Coin (USDC), the two largest stablecoins, Terra’s UST is decentralized, meaning it cannot rely on centralized parties to ensure that its price remains stable. . Users are able to shield the UST token by burning the native LUNA token, which helps keep the value of the largest algorithmic stablecoin strictly at $1.For example, the algorithmic stablecoin Iron Finance (IRON) notoriously lost its peg and fell to nearly zero last June. UST also declined significantly below $1 in the past due to market volatility. The creation of massive bitcoin reserves is meant to ensure that the fledgling stablecoin will be able to withstand a significant market correction.
Heavy buying of Terra is no longer able to drive up the price of bitcoin. The largest cryptocurrency is currently trading above the $40,000 level.
Last week, LFG also bought $100 million worth of Avalanche (AVAX) tokens to diversify its holdings.