- May 9, 2022
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
The Bitcoin price plunged below $31,000 on Monday, marking a new low for the year. Altcoins also sold off sharply.
Roughly $1.4 billion worth of Bitcoin (BTC) was reportedly moved from a wallet tied to Luna Foundation Guard (LFG) on Monday, raising questions about its ultimate destination on a day that has seen Bitcoin’s price tumble more than 11%.
Data from blockchain explorer Blockchair revealed Monday that 42,530.82827771 BTC was spent from the LFG wallet, though its destination was unknown. It has been speculated that the funds were split into two batches — roughly 12,500 BTC and 30,000 BTC, respectively — with a portion reportedly 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, Twitter account Whale Alert revealed that 12,531 BTC had been transferred from an unknown wallet to another unknown wallet. Whale Alert provides tracker and analytics reporting 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 LFG announced that it was taking decisive steps to “proactively defend the stability of the UST peg [and] broader Terra economy,” referring to its popular algorithmic stablecoin TerraUSD, which fell below its United States dollar peg. Measures included loaning $750 million worth of BTC to over-the-counter trading firms to help protect the peg of UST and to loan $750 million worth of UST to accumulate more Bitcoin as 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 reached a low of $0.9428 on Monday, according to CoinMarketCap.
Related: LUNA drops 20% in a day as whale dumps Terra’s UST stablecoin — selloff risks ahead?
The value of Terra (LUNA) also declined significantly over the weekend, though project co-founder Do Kwon warned that the selloff was a result of a coordinated attack against the protocol. He also clarified on Sunday that LFG is “not trying to exit its bitcoin position,” but that it was putting capital in the hands of a professional market maker to buy UST if the price falls below the peg and buy BTC if the price was greater to or equal to the 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 < peg
2) Buy BTC if price >= pegthus significantly strengthening the liquidity around UST peg
— Do Kwon (@stablekwon) May 9, 2022
On Monday, Kwon also tweeted that he would be “Deploying more capital,” though didn’t specify to what extent.
Extreme market volatility follows LFG’s acquisition of $1.5 billion in Bitcoin completed last week via over-the-counter swaps with Genesis Trading and direct purchases from crypto venture fund Three Arrows Capital. At the time, the nonprofit organization was said to hold roughly $3.5 billion worth of BTC at an average price of around $37,100 per coin. BTC price reached a low of around $30,300 on Monday, according to data from Cointelegraph Markets Pro and TradingView.
This story is being updated.
