Allegedly.
BlackRock and Citadel allegedly caused one of the largest #crypto crash of the last years. The two investors allegedly borrowed 100k #BTC from Gemini, swapped 25K of #BTC into #TerraUSD (#UST), called Terra Foundation suggesting they’d want to sell a large chunk of BTC for UST, and hinted to buy them at discount to avoid moving the market. https://lnkd.in/dAi_yJm2
Terra ($Luna) agreed to buy BTC for UST at a discount, lowering its own UST liquidity and reserves significantly. After which, BlackRock and Citadel dumped all UST and #BTC causing massive slippage and triggering a cascade of forced selling in both assets.
At the same time, this also triggered a cascade of withdrawals from another large crypto, $AnchorProtocol, holding large quantities of $Luna. The withdrawals were more than Anchor could repay, triggering a further sell-off in $Luna, thus further breaking the $1 peg of UST/USD.
#BTC currently trading below $27,000 (down 32.2% in 1 week) can now be bought by BlackRock and Citadel much cheaply, they can repay their loan, and pocket billions in difference. Meanwhile, over $300bn of long positions in stable and altcoins were wiped out, and $Luna tumbled from $86 to $0.16 in less than a week.
While BlackRock and Citadel denied the claims, only the actions of very large institutional investors could trigger such a tumble by two of the largest #cryptocurrencies. This was pure market manipulation.
Alternatively:
This blood seems to come from 1 trade 👇
or attack - it depends on your point of view.
🧐 Explanation:
At the end of March, the Luna Foundation (LFG), an once promising #blockchain, bought 1bn $ value of #bitcoin to back its stable-coin Terra $UST.
In a nuthshell, if $UST lost its peg - means that it’s trading less than a 1$ - LFG would sell some Bitcoin to restore it.
👉🏽 So, the attacker strategy was this:
- Short 4.2bn $ of BTC
- Depeg $UST to make LFG selling its bitcoin treasury and making his trade a winning trade.
He succeeded and by opening his position with a 42k $ BTC, we estimate than he made more than 800m $ with BTC current price (31k $).
Right now, we have 1 $UST = 0,42 $USD and 1 $LUNA = 5$.
📉 85% of loss for the ecosystem in a day.
He’s the blockchain version of George Soros.
If you want to understand deeper what happened, check this tweet out!
https://lnkd.in/eAwHD4vx
