Thursday, March 23, 2023
  • Login
EthozEdge
No Result
View All Result
  • Home
  • ETHO News
  • EVM News
    • Avalanche Network
    • Ethereum
    • Fantom Opera Chain
    • Harmony Chain
    • Huobi Eco Chain
    • Polygon Chain
  • Crypto News
    • Altcoin News
    • Bitcoin
    • Blockchain
    • Crypto Exchanges
    • Crypto Mining
    • Crypto Regulation News
    • DeFi
    • NFT
    • Metaverse
    • Scam News
    • Web 3.0
Cryptocurrency Marketcap
  • Home
  • ETHO News
  • EVM News
    • Avalanche Network
    • Ethereum
    • Fantom Opera Chain
    • Harmony Chain
    • Huobi Eco Chain
    • Polygon Chain
  • Crypto News
    • Altcoin News
    • Bitcoin
    • Blockchain
    • Crypto Exchanges
    • Crypto Mining
    • Crypto Regulation News
    • DeFi
    • NFT
    • Metaverse
    • Scam News
    • Web 3.0
No Result
View All Result
EthozEdge
No Result
View All Result
Home Crypto News Bitcoin

LFG Bitcoin Reserves At Risk

by ethozedge
May 9, 2022
in Bitcoin
Reading Time: 8 mins read
A A
0
Share on FacebookShare on Twitter


The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

UST Dollar Peg Collapses

What’s been developing over the weekend and has been amplified today is the depegging of the Terra stablecoin (UST) to the U.S. dollar now with Terra currently trading at $0.85. Many of these market dynamics have been playing out in near real time today as the situation worsens and will likely change again over the next 24 hours. It started with billions of dollars in UST leaving the high-yielding Anchor Protocol over the weekend and turned into a full-on digital bank run.

UST relies on the LUNA token to maintain its price through algorithmic minting and burning mechanics. Through this method, an arbitrage opportunity is created when UST is off its $1 peg. Traders can burn LUNA and create new UST when UST is priced over $1 and profit. When UST is below $1, UST gets burned and LUNA is minted to help stabilize the peg. Yet, as UST has suffered a blow to demand and liquidity, LUNA has fallen nearly 26% in just one day while BTC is down nearly 8%.

As the Terra stablecoin becomes increasingly depegged from the U.S. dollar, the biggest buyer of bitcoin in recent months could become its biggest forced seller.

As UST has suffered a blow to demand and liquidity, LUNA has fallen nearly 26% in just one day while BTC is down nearly 8%.

Why this matters for bitcoin is because the centralized Luna Foundation Guard (LFG) has accumulated 42,530 bitcoin ($1.275 billion at a $30,000 price) as reserves to be used in these exact situations, to defend the UST peg when it sustains below the $1. And currently, that is exactly what they are attempting to do.

As the Terra stablecoin becomes increasingly depegged from the U.S. dollar, the biggest buyer of bitcoin in recent months could become its biggest forced seller.

Luna Foundation Guard is attempting to leverage its BTC reserves to defend its UST peg.

As a response, the LFG voted earlier today to loan out $750 million of bitcoin and $750 million of UST to OTC trading firms in efforts to help sustain the UST peg. Later in the day, the LFG announced a withdrawal of nearly 37,000 BTC to loan out to market makers highlighting that it is currently being used to buy UST. 

Now the main risk to the market is that the biggest buyer of bitcoin over the last couple months will now become the market’s biggest forced seller. The market expectations and potential selling have certainly played a role in bitcoin’s historic selloff today, but it comes at the same time that broader equity markets have been selling off in tandem. Bitcoin’s correlation to broader equity indexes and tech stocks is at historic highs and is following the same market dynamics since November 2021.

As a result of the rise in global interest rates, 40-year high inflation, deteriorating growth and a macro credit sell-off and unwinding unfolding, we’ve been highlighting these dynamics and the larger market risks at hand for months.

As the Terra stablecoin becomes increasingly depegged from the U.S. dollar, the biggest buyer of bitcoin in recent months could become its biggest forced seller.

Bitcoin price and Nasdaq futures correlation.

Bitcoin Magazine Pro Banner





Source link

Tags: Bitcoinbitcoin newscrypto analysiscrypto newsEthoz EdgeLatest bitcoin newslatest crypto newsLFGReservesRisk
Share76Tweet47

Related Posts

Just Saying No to Digital Dollars Means Cementing the Surveillance Status Quo — CoinDesk

by ethozedge
March 23, 2023
0

Whether the U.S. participates or not, the rest of the world is exploring and deploying CBDCs. According to the Atlantic...

Coinbase Tries AI Assistant Chatgpt for Pre-Listing Risk Assessment of Tokens – Exchanges Bitcoin News

by ethozedge
March 23, 2023
0

Crypto exchange Coinbase has tested Openai’s Chatgpt as a token verification tool comparing it with its standard security procedure. In...

Here’s How The Industry Will

by ethozedge
March 23, 2023
0

If the US Securities and Exchange Commission’s (SEC) Wells Notice against Coinbase makes anything clear, it’s that the agency is...

US Senator Introduces Bill to Ban Direct-to-Consumer Central Bank Digital Currency – Regulation Bitcoin News

by ethozedge
March 23, 2023
0

U.S. Senator Ted Cruz has introduced “legislation to prohibit the Federal Reserve from developing a direct-to-consumer” central bank digital currency...

Blockchain-Enabled SIM Card for Crypto Investors Fuels Conflux Growth; Bitcoin BTC Price Hovers Near $27.3K After Fed Decision

by ethozedge
March 23, 2023
0

These are set to be built in partnership with China Telecom, the second-largest wireless carrier in China with an estimated...

Load More
  • Trending
  • Comments
  • Latest

🔴 Bank of America Bets on Crypto

April 11, 2022

Pomelo Launches Family Credit Cards to Combine Credit and International Money Transfer

August 16, 2022

How to Add Polygon (MATIC) to Your MetaMask Wallet

May 28, 2022

The Sandbox Price Prediction 2022-2030: HODL or DUMP?

May 25, 2022

Successful Beta Service launch of SOMESING, ‘My Hand-Carry Studio Karaoke App’

0

At least 54 apes were stolen in BAYC Instagram hack

0

Binance Introduces New Crypto Card for Ukrainian Refugees

0

55,000 Meta Cricket League NFTs sell out in nine minutes

0

Kraken Halts ACH Deposits and Withdrawals via Silvergate

March 23, 2023

Just Saying No to Digital Dollars Means Cementing the Surveillance Status Quo — CoinDesk

March 23, 2023

8 Best Crypto Airdrops in 2023: Get Free Crypto

March 23, 2023

Is There a Sunny Outlook for Solana?

March 23, 2023
Facebook Twitter LinkedIn Tumblr RSS
EthozEdge

Find the latest Bitcoin, Ethereum, blockchain, crypto, Business, Fintech News, interviews, and price analysis at EthozEdge

CATEGORIES

  • Altcoin News
  • Avalanche Network
  • Binance Smart Chain
  • Bitcoin
  • Blockchain
  • Crypto Exchanges
  • Crypto Mining
  • Crypto Regulation News
  • DeFi
  • Ethereum
  • EVM News
  • Fantom Opera Chain
  • Harmony Chain
  • Huobi Eco Chain
  • Metaverse
  • NFT
  • Polygon Chain
  • Scam News
  • Web 3.0
  • XDai Chain

SITE MAP

  • Disclaimer
  • Privacy Policy
  • DMCA
  • Cookie Privacy Policy
  • Terms and Conditions
  • Contact us

Copyright © 2022 - EthozEdge.
EthozEdge The Crypto is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • ETHO News
  • EVM News
    • Avalanche Network
    • Ethereum
    • Fantom Opera Chain
    • Harmony Chain
    • Huobi Eco Chain
    • Polygon Chain
  • Crypto News
    • Altcoin News
    • Bitcoin
    • Blockchain
    • Crypto Exchanges
    • Crypto Mining
    • Crypto Regulation News
    • DeFi
    • NFT
    • Metaverse
    • Scam News
    • Web 3.0

Copyright © 2022 - EthozEdge.
EthozEdge The Crypto is not responsible for the content of external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
  • JDBJDB(JDB)$0.021575-0.61%
  • bitcoinBitcoin(BTC)$28,441.00-0.87%
  • ethereumEthereum(ETH)$1,835.972.04%
  • USDEXUSDEX(USDEX)$1.07-0.47%
  • tetherTether(USDT)$1.01-0.30%
  • binancecoinBNB(BNB)$331.180.29%
  • usd-coinUSD Coin(USDC)$1.010.02%
  • rippleXRP(XRP)$0.4484391.37%
  • cardanoCardano(ADA)$0.3794971.09%
  • dogecoinDogecoin(DOGE)$0.0779361.92%
  • staked-etherLido Staked Ether(STETH)$1,831.502.07%
  • matic-networkPolygon(MATIC)$1.140.18%
  • solanaSolana(SOL)$22.45-1.49%
  • binance-usdBinance USD(BUSD)$1.00-0.50%
  • polkadotPolkadot(DOT)$6.382.14%
  • litecoinLitecoin(LTC)$93.4615.56%
  • shiba-inuShiba Inu(SHIB)$0.000011-0.40%
  • tronTRON(TRX)$0.064918-3.48%
  • avalanche-2Avalanche(AVAX)$17.640.64%
  • daiDai(DAI)$1.00-0.20%
  • uniswapUniswap(UNI)$6.382.48%
  • wrapped-bitcoinWrapped Bitcoin(WBTC)$28,500.00-0.54%
  • chainlinkChainlink(LINK)$7.591.16%
  • cosmosCosmos Hub(ATOM)$11.780.15%
  • ToncoinToncoin(TON)$2.26-7.69%
  • leo-tokenLEO Token(LEO)$3.36-0.80%
  • ethereum-classicEthereum Classic(ETC)$20.891.92%
  • moneroMonero(XMR)$155.501.01%
  • okbOKB(OKB)$44.91-1.89%
  • bitcoin-cashBitcoin Cash(BCH)$129.10-0.91%
  • Aerarium FiAerarium Fi(AERA)$7.15-13.10%
  • stellarStellar(XLM)$0.0935121.01%
  • filecoinFilecoin(FIL)$5.972.58%
  • AptosAptos(APT)$13.279.01%
  • lido-daoLido DAO(LDO)$2.381.51%
  • true-usdTrueUSD(TUSD)$1.00-0.09%
  • hedera-hashgraphHedera(HBAR)$0.0629340.03%
  • quant-networkQuant(QNT)$128.15-0.03%
  • nearNEAR Protocol(NEAR)$2.072.49%
  • crypto-com-chainCronos(CRO)$0.070509-0.06%
  • vechainVeChain(VET)$0.0236861.80%
  • ArbitrumArbitrum(ARB)$1.30-74.28%
  • blockstackStacks(STX)$1.183.80%
  • algorandAlgorand(ALGO)$0.221000-2.54%
  • internet-computerInternet Computer(ICP)$5.230.30%
  • apecoinApeCoin(APE)$4.152.05%
  • fantomFantom(FTM)$0.501.98%
  • the-graphThe Graph(GRT)$0.1535532.99%
  • eosEOS(EOS)$1.172.10%
  • the-sandboxThe Sandbox(SAND)$0.670.37%
  • decentralandDecentraland(MANA)$0.620.95%
  • aaveAave(AAVE)$78.230.69%
  • elrond-erd-2MultiversX(EGLD)$43.761.47%
  • tezosTezos(XTZ)$1.181.85%
  • flowFlow(FLOW)$1.030.29%
  • immutable-xImmutableX(IMX)$1.22-7.74%
  • theta-tokenTheta Network(THETA)$1.051.10%
  • fraxFrax(FRAX)$1.00-0.19%
  • axie-infinityAxie Infinity(AXS)$8.720.86%
  • kucoin-sharesKuCoin(KCS)$9.09-1.69%
  • neoNEO(NEO)$12.422.41%
  • havvenSynthetix Network(SNX)$2.72-3.28%
  • optimismOptimism(OP)$2.55-2.33%
  • conflux-tokenConflux(CFX)$0.379730-6.55%
  • rocket-poolRocket Pool(RPL)$40.49-0.07%
  • BitDAOBitDAO(BIT)$0.54-2.60%
  • gatechain-tokenGate(GT)$5.400.93%
  • paxos-standardPax Dollar(USDP)$1.00-0.26%
  • curve-dao-tokenCurve DAO(CRV)$0.98-0.84%
  • terra-lunaTerra Luna Classic(LUNC)$0.000127-0.40%
  • mina-protocolMina Protocol(MINA)$0.852.59%
  • bitcoin-cash-svBitcoin SV(BSV)$37.620.88%
  • usddUSDD(USDD)$1.00-0.68%
  • klay-tokenKlaytn(KLAY)$0.2332121.05%
  • WhiteBIT TokenWhiteBIT Token(WBT)$5.01-0.12%
  • dashDash(DASH)$62.9910.88%
  • pancakeswap-tokenPancakeSwap(CAKE)$3.80-0.38%
  • gmxGMX(GMX)$77.23-1.62%
  • chilizChiliz(CHZ)$0.1234890.57%
  • sapphireSapphire(SAPP)$0.7035.32%
  • ecasheCash(XEC)$0.0000322.51%
  • CloutContractsCloutContracts(CCS)$52.461,000.00%
  • makerMaker(MKR)$684.490.28%
  • frax-shareFrax Share(FXS)$8.242.60%
  • iotaIOTA(MIOTA)$0.2176521.51%
  • bittorrentBitTorrent(BTT)$0.000001-0.99%
  • huobi-tokenHuobi(HT)$3.70-7.21%
  • singularitynetSingularityNET(AGIX)$0.492399-2.93%
  • Bitget TokenBitget Token(BGB)$0.400346-0.89%
  • compound-ethercETH(CETH)$36.871.30%
  • xdce-crowd-saleXDC Network(XDC)$0.039621-0.77%
  • EdgecoinEdgecoin(EDGT)$1.01-0.22%
  • Tokenize XchangeTokenize Xchange(TKX)$6.531.27%
  • pax-goldPAX Gold(PAXG)$1,998.971.60%
  • trust-wallet-tokenTrust Wallet(TWT)$1.200.11%
  • render-tokenRender(RNDR)$1.36-4.49%
  • tether-goldTether Gold(XAUT)$1,992.03-0.04%
  • radixRadix(XRD)$0.04733814.13%
  • zilliqaZilliqa(ZIL)$0.0286532.14%
  • mask-networkMask Network(MASK)$6.0517.36%
  • binaryxBinaryX(BNX)$165.94-5.94%
  • loopringLoopring(LRC)$0.3658004.89%
  • osmosisOsmosis(OSMO)$0.82-1.16%
  • compound-usd-coincUSDC(CUSDC)$0.022864-0.12%
  • Halo CoinHalo Coin(HALO)$0.057352-0.04%
  • 1inch1inch(1INCH)$0.530.42%
  • thorchainTHORChain(RUNE)$1.451.73%
  • arweaveArweave(AR)$8.56-1.83%
  • Rocket Pool ETHRocket Pool ETH(RETH)$1,966.712.18%
  • convex-financeConvex Finance(CVX)$5.51-0.66%
  • zcashZcash(ZEC)$38.367.56%
  • oec-tokenOKC Token(OKT)$23.171.08%
  • fetch-aiFetch.ai(FET)$0.390357-0.48%
  • enjincoinEnjin Coin(ENJ)$0.4055711.77%
  • dydxdYdX(DYDX)$2.642.38%
  • casper-networkCasper Network(CSPR)$0.037052-0.61%
  • kavaKava(KAVA)$0.89-1.97%
  • gemini-dollarGemini Dollar(GUSD)$1.00-0.68%
  • nexoNEXO(NEXO)$0.715.35%
  • btse-tokenBTSE Token(BTSE)$2.410.38%
  • DeFiChainDeFiChain(DFI)$0.58-0.83%
  • basic-attention-tokenBasic Attention(BAT)$0.2568954.06%
  • FlareFlare(FLR)$0.0316730.16%
  • EthereumPoWEthereumPoW(ETHW)$3.491.68%
  • FLOKIFLOKI(FLOKI)$0.000038-2.12%
  • cdaicDAI(CDAI)$0.022228-0.34%
  • ethereum-name-serviceEthereum Name Service(ENS)$14.081.03%
  • nemNEM(XEM)$0.040079-0.53%
  • DogechainDogechain(DC)$0.001787-24.98%
  • Nexus MutualNexus Mutual(NXM)$52.511.99%
  • MagicMagic(MAGIC)$1.65-8.94%
  • woo-networkWOO Network(WOO)$0.2080112.01%
  • qtumQtum(QTUM)$3.313.65%
  • WEMIXWEMIX(WEMIX)$1.40-2.05%
  • injective-protocolInjective(INJ)$4.252.11%
  • Aleph ZeroAleph Zero(AZERO)$1.550.19%
  • holotokenHolo(HOT)$0.0019002.08%
  • baby-doge-coinBaby Doge Coin(BABYDOGE)$0.000000-3.13%
  • theta-fuelTheta Fuel(TFUEL)$0.0550352.45%
  • galaGALA(GALA)$0.043051-0.16%
  • terra-luna-2Terra(LUNA)$1.36-2.80%
  • ravencoinRavencoin(RVN)$0.0268560.10%
  • kusamaKusama(KSM)$35.253.80%
  • celoCelo(CELO)$0.642.45%
  • compound-governance-tokenCompound(COMP)$44.470.28%
  • oasis-networkOasis Network(ROSE)$0.0598321.00%
  • decredDecred(DCR)$20.092.22%
  • bitcoin-goldBitcoin Gold(BTG)$16.91-0.63%
  • Access ProtocolAccess Protocol(ACS)$0.0098863.96%
  • gnosisGnosis(GNO)$113.441.28%
  • Gains FarmGains Farm(GFARM2)$8,150.47-3.26%
  • BeldexBeldex(BDX)$0.0558790.74%
  • olympusOlympus(OHM)$10.361.08%
  • yearn-financeyearn.finance(YFI)$8,736.18-0.81%
  • AstarAstar(ASTR)$0.065717-2.33%
  • audiusAudius(AUDIO)$0.2882251.48%
  • KaspaKaspa(KAS)$0.0163421.30%
  • balancerBalancer(BAL)$7.095.62%
  • ankrAnkr Network(ANKR)$0.0347121.00%
  • linkLINK(LN)$42.141.17%
  • safemoonSafeMoon [OLD](SAFEMOON)$0.0000000.48%
  • harmonyHarmony(ONE)$0.0220421.45%
  • liquity-usdLiquity USD(LUSD)$1.02-0.04%
  • Bone ShibaSwapBone ShibaSwap(BONE)$1.15-2.60%
  • chiaChia(XCH)$38.621.37%
  • stepnSTEPN(GMT)$0.4177703.25%
  • nucypherNuCypher(NU)$0.2014324.43%
  • SSV NetworkSSV Network(SSV)$36.56-0.13%
  • IdeaChainIdeaChain(ICH)$4.730.00%
  • huobi-btcHuobi BTC(HBTC)$28,539.000.02%
  • ftx-tokenFTX(FTT)$1.89-21.52%
  • convex-crvConvex CRV(CVXCRV)$0.87-0.11%
  • Gains NetworkGains Network(GNS)$8.264.41%
  • AstraferAstrafer(ASTRAFER)$1.600.63%
  • omisegoOMG Network(OMG)$1.79-1.08%
  • Crypto Gladiator LeagueCrypto Gladiator League(CGL)$0.16194440.57%
  • golemGolem(GLM)$0.2474260.76%
  • BlurBlur(BLUR)$0.59-5.00%
  • iotexIoTeX(IOTX)$0.0256451.84%
  • moonbeamMoonbeam(GLMR)$0.3950662.03%
  • jasmycoinJasmyCoin(JASMY)$0.0049180.78%
  • justJUST(JST)$0.026358-1.64%
  • bloxBlox(CDT)$0.344124-17.98%
  • DAO MakerDAO Maker(DAO)$1.565.67%
  • Manchester City Fan TokenManchester City Fan Token(CITY)$11.87-1.78%
  • world-mobile-tokenWorld Mobile Token(WMT)$0.2920233.33%
  • kadenaKadena(KDA)$1.02-0.69%
  • escoin-tokenEscoin(ELG)$2.881.03%
  • Frax EtherFrax Ether(FRXETH)$1,836.432.13%
  • wavesWaves(WAVES)$2.260.49%
  • Meerkat SharesMeerkat Shares(MSHARE)$11,715.17-5.03%
  • ecomiECOMI(OMI)$0.000834-3.27%
  • tether-eurtEuro Tether(EURT)$1.090.58%
  • Staked LunaStaked Luna(STLUNA)$88.35-0.49%
  • amp-tokenAmp(AMP)$0.003938-0.29%
  • nervos-networkNervos Network(CKB)$0.00651712.99%
  • band-protocolBand Protocol(BAND)$1.751.88%
  • siacoinSiacoin(SC)$0.0041251.33%
  • sushiSushi(SUSHI)$1.10-5.21%
  • ontologyOntology(ONT)$0.2384522.62%