The central theses:
- Tron DAO Reserve has announced that it has bought $50 million worth of Bitcoin and TRX to boost USDD’s reserves.
- USDD is currently 197% overcollateralised.
- The USDD stablecoin is now backed by 14,040.6 Bitcoin, 140 million USDT and 1.906 billion in TRX.
- Bitcoin and TRX buying comes as BTC retests the $28,000 support level.
Tron DAO Reserve, the organization behind the management of the USDD reserves, just announced that it has purchased $50 million worth of Bitcoin (BTC) and Tron (TRX).
The announcement of the purchase was made via the following tweet, which also stated that bitcoin and TRX should “protect the entire blockchain industry and crypto market.”
To protect the entire blockchain industry and crypto market, TRON DAO Reserve buys $50 million worth of #BTC and #TRX as reserve.
— TRON DAO Reserve (@trondaoreserve) June 11, 2022
USDD is now 197% overcollateralised.
The $50 million purchase of Bitcoin and Tron (TRX) is part of Tron DAO’s mission to over-hedge USDD’s stablecoin by at least 130%. At the time of writing, the USDD algorithmic stablecoin is overcollateralized by a factor of 197%, as highlighted in the screenshot below courtesy of the USDD website.
Current USDD statistics on reserves, collateralization and issuance. Source, USDD.io
USDD Reserves = 14,000 BTC, 140M USDT and 1.906B TRX
Additionally, the screenshot above indicates that USDD is currently supported by 14,040.6 in bitcoin, 140 million in tether (USDT), and 1.906 billion in tron (TRX). USDD reserves are also currently estimated at $683.515 million.
Bitcoin hits local low of $28,099
Tron DAO reserve’s $50 million purchase of Bitcoin and TRX comes at a time when BTC is undergoing a sizeable pullback to a local low of $28,099 set just moments ago. The daily BTC/USDT chart below still suggests a few more bearish days for Bitcoin. Daily MFI, RSI and MACD point to continuation of selling below the 50-day moving average (white)
Bitcoin’s 6-hour chart suggests that the $28,000 support could hold.
However, as highlighted below, Bitcoin’s 6-hour chart suggests that selling could find a short-term bottom at the $28,000 support area.
Additionally, $28,000 could be a sizeable support zone for Bitcoin as the 6-hour MFI and RSI are pointing to an oversold scenario. However, given the low trading volume that is characteristic of weekends during crypto bear markets, caution is advised when attempting to long Bitcoin at current levels.
Consequently, a wait-and-see approach might be a more logical move as Bitcoin needs to retest the $26,700 low set during the crypto market sell-off triggered by UST’s depegging event in early May.
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