Macro strategist Lyn Alden believes that Terra’s (LUNA) recent Bitcoin buying spree could be the catalyst that triggers a capitulation event for BTC and the rest of the crypto markets.
Over the last few months, the Luna Foundation Guard (LFG), the non-profit organization built to support Terra, has been aggressively gomilajuće BTC to the tune of $1.63 billion.
According to Terra founder Do Kwon, the massive Bitcoin buys are designed to back Terra’s native dollar-pegged stablecoin EarthUSD (FSO).
Now, the macro strategist kaže their 410,700 Twitter followers that a sharp decline in LUNA’s valuation might force the LFG to tap into its Bitcoin reserves to keep UST stable.
“Ako Luna ima sličan pad cijene kao Fantom (FTM) ili neki od ovih teško pogođenih kriptovaluta, UST veza bi bila u opasnosti. Ako UST veza postane ugrožena, LFG bi prodavao bitcoin rezerve na već meko tržište. Taj tip događaja mogao bi označiti kapitulaciju ciklusa.”
Alden also ističe another risk where bearish market conditions force UST holders to pretvoriti the stablecoin into LUNA or BTC in an effort to cash out.
“Unlike a crypto-collateralized stablecoin, there is no specific threshold where UST breaks. However, if LUNA gets small relative to UST, the probability of an algorithmic bank run increases… Many of them would liquidate their BTC for cash since their positioning at the time was meant to be a stablecoin.”
The macro analyst also highlights another risk involving the Sidreni protokol (ANC), a savings and lending borrowing platform built on the Terra blockchain that allows users to zaraditi as much as 19.5% in annual percentage yield (APY).
According to Alden, Anchor Protocol’s high APY is a double-edged sword as it služi as both a demand creator for UST and a ticking time bomb that could go off.
“Then there’s the unsustainable Anchor yield timebomb. The time bomb is not about how well-managed the yield decline will be. It’s about what happens to UST demand structurally, when the primary demand driver (artificially high Anchor yields) no longer exists.”
Check Price Action
Ne propustite ritam - Subscribe da biste dobili kripto e-mail upozorenja koja se dostavljaju direktno u vašu ulaznu poštu
Pratite nas na cvrkut, Facebook i telegram
surfovati Daily Hodl Mix
Izjava o odricanju odgovornosti: Mišljenja iznesena u Daily Hodlu nisu savjet o ulaganju. Ulagači trebaju obaviti svoju dužnu opremu prije nego što ulože bilo koja rizična ulaganja u bitcoin, kripto valutu ili digitalnu imovinu. Imajte na umu da su vaši transferi i trgovine na vlastiti rizik, a za sve gubitke koji mogu nastati odgovoran ste. Daily Hodl ne preporučuje kupovinu ili prodaju bilo koje kripto valute ili digitalne imovine, niti je Daily Hodl savjetnik za ulaganje. Imajte na umu da Daily Hodl sudjeluje u affiliate marketingu.
Izdvojena slika: Shutterstock / jamesteohart
Source: https://dailyhodl.com/2022/05/03/heres-how-terra-luna-could-trigger-bitcoin-btc-and-crypto-market-capitulation-macro-analyst-lyn-alden/