After the recent fiasco involving Terra and his two natives cryptocurrencies lost value, the organizations behind the project said they will seek outside help. One of the first established financial firms to offer its help is Swiss wealth manager GAM Holding AG.
- The 40-year-old company’s official press release says it has entered into negotiations with Terraform Labs to “in support of its Luna stablecoin (UST) to contribute”.
- GAM said it was “expected” to invest between $2 billion and $3 billion to “absorb excess supply of UST during the current sell-off,” which should revive UST’s peg to the US dollar.
“Our interest in supporting UST reflects our interest in supporting a vibrant, innovative and resilient crypto market. We firmly believe in the ecosystem of Terra. Equally important, we believe in UST’s algorithmic valuation approach. Naturally, when investors have proper incentives, they act in a way that ensures price stability.” – commented GAM CEO Peter Sanderson.
- CryptoPotato summed up the events of the last week that brought down not only Terra and its cryptocurrencies but the entire market.
- Due to the algorithmic nature of UST and its relationship with LUNA, investors began exploiting the system by arbitrating with LUNA when the stablecoin began to lose its peg to the dollar.
- This led to massive selling pressure on the latter, which resulted in an overwhelming price drop. LUNA was trading above $80 a week ago but is trading at $0.000055 at the time of writing. Many exchanges have halted trading, and hours ago Terra launched (another) Blockchain-Stop announced.
Source: Crypto News Deutsch