Panthera Capital, Hack VC, and Others Made Massive Gains Trading LUNA Before It Crashed.
Panthera, alongside other venture capitalists, were lucky to close their positions before the token dipped.
It is no longer new that Terra ecosystem tokens LUNA and UST suffered one of the most devastating collapses since the inception of the cryptocurrency industry that leading to losses worth over $60 billion.
Although Terra had above $3 billion worth of bitcoin to sustain the UST peg with the dollar (1:1) in reserves, when UST started to lose its $1 peg LUNA foundation tried to save it by disbursing almost all of the bitcoin in its reserve but it never worked as a result of such instability investors rushed to get rid of both UST and LUNA, sending prices off a cliff.
While early investors like Binance did not get lucky enough to pull out of the project on time, several others did, as they reported that they made a fortune investing in the project. Binance’s CEO confirmed that Binance invested $3M in Terra (LUNA) in 2018 as Binance Labs invested in hundreds of projects. The 15M coins that cost Binance $3M in 2018 could have been sold at 560x returns when Luna was trading at an all-time high of $119, but the exchange Never moved those coins nor sold them while still holding them.
Delphi Digital, Seoul-based Hashed Ventures disclosed that they have lost over $3.5 billion.
Lucky LUNA Investors
According to a recent CNBC report, Terra’s investors such as venture capital firm Panthera Capital, Hack VC, and CMCC Global were among the lucky investors that got out early before the UST and LUNA crashed into the dust.
Notably, Panthera Capital disclosed that its $1.7 million investment in LUNA saw it record a 100-fold profit, as it sold before the unfortunate incident that rocked the project earlier this month.
Joey Krug, the fund’s co-chief investment officer, said the company sold 87% of its LUNA holding between January 2021 and April 2022.
Krug added that the company also sold another 8% of its LUNA holdings this month when it became evident that UST has lost its peg to the dollar.
Panthera Capital had to hold on to the remaining LUNA tokens with the hope that they would surge back.
“For the large portion which we sold over 2021 and part of 2022, it was a really simple risk management reason. It kept becoming a larger and larger part of the fund and so we had to de-risk it since you can’t really run a liquid hedge fund with one position being a super large portion of the fund,” Krug said.
Commenting on the amount of profit the company made via its LUNA investment, Krug said $171 million returns were made from the $1.7M initial investment.
Other Lucky Investors
Similarly, Hack VC and CMCC Global also made huge gains. However, they failed to disclose how much profit they made from their investments in LUNA.
Per the report, Hack VC noted that it sold its LUNA holdings in December 2021 while CMCC Global disclosed that it sold the tokens in March, less than two months before the coins dipped drastically.
CMCC Global founder Martin Baumann noted that the company decided to sell based on its concerns about Terra’s tech as well as regulations.
“As opposed to asset backed stablecoins, which are derivatives of existing USD in circulation, UST was effectively increasing the money supply of USD in existence,” Braumann told CNBC.
Meanwhile, not too many investors got lucky. Some saw their holdings in investments become worthless at the time the cryptocurrencies crashed.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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