Crypto fund Arca is probably one of the many currently suffering considerable fallout after the collapse of the Terra blockchain’s LUNA-powered stablecoin, UST.
This comes after the firm, which manages $500 million in assets, sent out a note on Tuesday telling its partners that it is certain that Terra’s UST stablecoin will eventually regain its peg. The firm concluded by stating that this is an ideal buying opportunity.
In the note, Arca also stated that it held an ad hoc investment and risk committee meeting to discuss the current situation.
On Monday night, UST was well below 63 cents, and LUNA was trading at $24.60.
Arca CEO, Rayne Steinberg, wrote to the investors on Tuesday saying that after analyzing the numbers “we felt, and continue to feel, that UST will ultimately maintain its peg and a number of attractive opportunities had become available.”
Steinberg elaborated on these so-called opportunities when he said that “[they were] able to purchase UST at a significant discount to par in the Digital Yield Fund (DYF) and then deposit with FTX who were paying 100% annual percentage yield (APY) given the buyer/seller imbalance during peak fear.”
Steinberg also touched on the fact that the firm has seen many crises before and this one is no different. Arca “welcomes these opportunities to be buyers when others are fearful.”
In related news, Justin Sun, the founder of TRON, announced in a tweet on May 12 that the TRON DAO Reserve will increase the USDC and TUSD supply on TRON by $400 million ($200 million each).
People’s opinions on the decision seem to be mostly positive. One user even said that the decision could be something the crypto ecosystem can learn from.