LUNA soars as Terra secures $1 billion for a Bitcoin-denominated UST reserve
- Terra announced it had raised $1 billion from Jump Crypto and Three Arrows Capital, with the funds set to go into a Bitcoin reserve for the network’s largest stablecoin TerraUSD (UST).
- LUNA price jumped over 14% to break above $60 after the news.
- Bitcoin was trading near $39,000 after a 4% upside, with bulls looking to strengthen above the key support at $38k.
LUNA, the native token on decentralised proof of stake (PoS) blockchain platform Terra, has soared more than 14% in the past 24 hours, amid a broader bounce in the crypto market.
Terra’s impressive rebound briefly pushed the coin’s value against the US dollar above $60 on Wednesday morning.
According to data from CoinGecko, the LUNA/USD pair is currently hugging the supply barrier, with momentum likely to push the token to highs last seen in January.
$1 billion for a BTC reserve
On Tuesday, the Luna Foundation Guard (LFG) announced it had successfully raised $1 billion in one of the crypto industry’s largest sales. The platform said the funds are going to into a Bitcoin-denominated reserve for its stablecoin TerraUSD (UST).
1/ The long awaited [REDACTED] 💎3 is here!
📣 The Luna Foundation Guard (LFG) has closed a $1 billion private token sale to establish a decentralized $UST Forex Reserve denominated in $BTC! 📣
🧵👇
— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) February 22, 2022
UST is a $12 billion market cap stablecoin, and the reserve funds are set to help ensure the 1:1 dollar peg is fully accounted for in ready funds.
According to LFG, the reserve provides for an extra layer of ensuring the dollar peg does not deviate so much during “contractionary cycles.”
“The UST Forex Reserve is an LFG initiative to provide a further layer of support for the UST peg using assets that are considered less correlated to the Terra ecosystem, like Bitcoin,” LFG wrote.
The decentralised Forex reserve for the stablecoin received investment backing from Jump Crypto and Three Arrows Capital among other top venture capital investors.
LUNA’s price has shot up in the past 24 hours due to the news. LUNA/USD currently changes hands near $59.97.
Elsewhere, Bitcoin price was up 4% at the time of writing to see the top cryptocurrency by market cap hover above $39,000. he BTC/USD pair had dipped below $37,000 on Tuesday as the Russia-Ukraine conflict spooked markets.
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