After the recent failure of Terra and its two underlying cryptocurrencies plunge in value, the organization behind the project said it would seek outside help. One of the first legacy finance companies to come out to provide support was Swiss asset manager GAM Holding AG.
- public official press release I read that the 40-year-old company has started negotiations with Terraform Labs “to help support the Luna stablecoin (UST)”.
- GAM said it is “expected” to invest between $2 billion and $3 billion “to absorb the excess supply of UST during the current sell-off,” which will bring the UST peg back to USD.
“Our interest in supporting UST reflects our interest in supporting a vibrant, innovative and resilient crypto market. We firmly believe in Terra’s ecosystem. Importantly, we believe in UST’s algorithmic approach to evaluation. When investors get the right incentives, they trade in a way that naturally maintains price stability.” – GAM CEO Peter Sanderson said.
- Crypto Potatoes Here’s a recap of last week’s events that took the entire market down, not just Terra and its cryptocurrency.
- As the stablecoin began to lose its peg against the dollar due to the algorithmic nature of UST and its relationship to LUNA, investors began to utilize the system by arbitrating with LUNA.
- This has created tremendous selling pressure on the latter, triggering an astonishing price drop. LUNA traded above $80 a week ago but is currently at $0.000055 as of writing this line. Many exchanges have stopped trading and Terra presentation A few hours before (another) blockchain disruption.
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