Leading Asset Manager Could Bail Out UST in Deal Worth Billions
ZURICH, SWITZERLAND / ACCESSWIRE / May 12, 2022 / Leading asset manager GAM Holding AG is pleased to announce that it is negotiating with Terraform Labs (Terra) to help support its Luna stablecoin (UST). GAM is expected to invest between $2 billion and $3 billion to absorb excess supply of UST during its current selloff. The move seeks to re-establish UST's peg to the US dollar.
UST has lost more than 96% of its value over the last week, reflecting a broad downturn in the cryptocurrency sphere. Like other stablecoins, it seeks to counter cybercurrency price volatility by tying its value to that of another currency-in its case, a $1 peg to the US dollar. Unlike many other stablecoins, UST maintains its peg algorithmically, providing incentives for traders to restrict fluctuations in its value through arbitrage.
"Our interest in supporting UST reflects our interest in supporting a vibrant, innovative, and resilient crypto market," notes GAM CEO Peter Sanderson. "We firmly believe in Terra's ecosystem. Just as importantly, we believe in UST's algorithmic approach to valuation. When investors have proper incentives, they naturally trade in ways that maintain price stability. When black swan events impact markets, opportunities blossom. We see opportunity in UST's recent activity, and continue to see promise in Terra's broader strategy."
To learn more about GAM's negotiations with Terra, or about its broader investment strategy, please contact Media Relations Officer Charles Naylor at +41 44 585 1750.
GAM is a leading independent, pure-play asset manager. The company provides active investment solutions and products for institutions, financial intermediaries, and private investors through three businesses: Investment Management, Fund Management Services and Wealth Management. GAM employed 605 FTEs in 14 countries with investment centres in London, Cambridge, Zurich, Hong Kong, New York, Milan, and Lugano as at 31 December 2021. The investment managers are supported by an extensive global distribution network. Headquartered in Zurich, GAM is listed on the SIX Swiss Exchange with the symbol ‘GAM'. The Group has AuM of CHF 94.8 billion (USD 103 billion) as at 31 March 2022.
SOURCE: GAM HOLDING