By Alicia Maher
Like other institutional investors, the LUNA foundation guard (LFG) is also accumulating more BTC. BTC advocates observed a considerable rise in paper BTC as the combined BTC exposure on the Proshares ETF reached new peak levels.
LFG’s BTC Reserve Fund
With the LFG’s plans to have a $10B BTC reserve fund, it is no wonder that they are part of the institutional investors accumulating more BTC for their reserves. Terraform labs boss, Do Kwon, revealed that the first stage of achieving the $10B worth of BTC reserve is to accumulate $3B over the next few months or by the end of this year. Then, the remaining amount will be bought over a more extended period.
Kwon claims that BTC reserves create a new financial era for BTC holders. He explained that it would be more attractive to hold P2P electronic cash and easier to spend it. Terraform had to make some OTC sales of its stablecoin (UST) and governance token (LUNA) to raise funds to increase its BTC reserves.
In other developments, a famous multinational oil and gas firm, Exxon, has announced it would divert excess natural gas from its drilling operations towards crypto mining operations. Already, Exxon has established a test facility in North Dakota and plans to set more facilities in locations across multiple continents, depending on the institutional demand for BTC. The oil and gas behemoth already has plots that it can use for these operations in Argentina, Guyana, Alaska, Germany, and Nigeria.
Proshares BTC ETF Reaches New Heights
BTC’s demand by institutional investors is majorly through indirect exposure, mainly ETFs traded on the Nasdaq stock exchange like Proshares ETF. According to arcane research, the combined BTC exposure in Proshares ETF reached a new peak level of nearly 29K BTC, with most inflows happening in the last fourteen days.
Nevertheless, legendary wall street investor, Caitlin Long, is worried over the rising importance of paper BTC. Long opined that paper BTC gives rise to fake supply, which results in actual demand and a decline in the digital asset’s value. She further claimed that the accurate measure of BTC value couldn’t be determined through its market value/realized value ratio.
Long explained that this ratio is reasonably inaccurate since intermediaries are responsible for small portions of the asset’s reserves. She opined that the market value of the leading digital asset is lower than its actual value. But real on-chain BTC is far less than paper BTC, and the asset holders suffer the difference. BTC’s price may likely rise as there is more demand for paper BTC, resulting in a huge supply shock.
Various BTC price analysts agree that a rally is on the horizon. While BTC price has surged over the 50- and 100-day EMA levels, it would only trade at the $60k level when it surpasses at least the 200-day EMA. It is also worth noting that a capitulation is possible.