Terra’s Additional 2508 Bitcoin Buy Fails To Stimulate Prices, Here’s Why
Terra community The Luna Foundation Guard (LFG) on Wednesday added about 2508 bitcoins worth over $100 million to its Bitcoin treasury. The latest buy has increased the LFG’s wallet address holding to 42,406.92 BTC. However, despite purchasing Bitcoin for $250 million this week, it has failed to push the BTC price above $40k.
The Bitcoin (BTC) price is down 11% in the last week, with the current price trading at $39,938. Moreover, the LUNA price has not reacted to the latest buy and is down nearly 27% over the last 7 days.
LFG Bitcoin Purchases Fail to Impact Bitcoin and LUNA Prices
Luna Foundation Guard (LFG) is planning to build a Bitcoin treasury of $10 billion to provide stability for its algorithmic stablecoin UST. The move is backed by Terra founder Do Kwon’s ambition to turn BTC into a reserve currency.
As per data by Bitinfocharts, the LFG acquired 2,508.94 BTC for $100 million. on April 13. While the latest buy saw a small profit after BTC’s price appreciated, LFG has so far made a loss of $96 million on its total BTC purchases.
Furthermore, recent trends have stirred concern among LUNA investors as the price continues to dip despite reports of LUNA being burned. Moreover, some have accused the LFG of using burned LUNA supply to buy Bitcoin.
Given LFG’s accumulation of BTC, LUNA’s price will also become more closely related to BTC’s performance- which is in a trough at the moment. LUNA critics have also argued that volatility in BTC could threaten LFG’s reserves, and in turn, the UST peg/
Bitcoin (BTC) and Terra (LUNA) Price Dive Lower
The crypto market bloodbath yesterday rattled investor sentiment, with the crypto market index moving into the ‘fear’ zone. According to CoinMarketCap, the Bitcoin price has plunged almost 12% in the last 7-day, and the LUNA price has dwindled by nearly 26% in the last week. In the last 24 hours, the BTC price is moving sideways, with the price moving around the $40k mark. Meanwhile, LUNA’s price is up just 1%, with the current price trading at $85.43 at the time of writing.