LFG Bitcoin Reserves At Risk As UST Dollar Peg Collapses

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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.

to defend the UST peg when it sustains below the $1. And currently, that is exactly what they are attempting to do.

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. 

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