The Terra ecosystem has increased its Bitcoin treasury by more than $1 billion since January, with four more purchases on March 28.
Co-founder and chief executive officer of the firm behind the Terra blockchain, Do Kwon, confirmed that there was a further $135 million in BTC purchased on March 28.
The Singapore-based Luna Foundation Guard now holds 27,785 BTC according to its wallet address. At current prices, this is worth around $1.32 billion.
Last week, Kwon tweeted that there is a $3 billion fund to seed the reserve backing the stablecoin and the reserve would eventually reach $10 billion. Bitcoin itself has gained almost 16% since that tweet on March 22.
Bitcoin-backed stablecoin
UST is a stablecoin that maintains its peg by minting and burning the LUNA token. It is not backed by fiat but decentralized crypto assets, such as the BTC reserve. This will help it maintain the dollar peg when there is a high demand for redeeming UST.
Speaking to Bloomberg earlier this month, Kwon stated that the reason they are particularly interested in Bitcoin is that it is the strongest digital reserve asset. “UST is going to be the first internet native currency that implements the Bitcoin standard as part of its monetary policy,” he added.
On March 29, 3ac co-founder Zhu Su commented on the narrative and how fast the ecosystem is developing:
“We’re seeing some of the earliest and most ambitious ideas in crypto starting to unfold. Crosschain decentralized stablecoin backed entirely by digitally native assets was the holy grail in 2016,”
Terra has the fourth-largest stablecoin behind Tether (USDT), USD Coin (USDC), and Binance USD (BUSD), with a market capitalization of $16.2 billion. UST supply has grown by 60% since the beginning of 2022.
LUNA hits ATH
Terra’s native token, LUNA, has been boosted by the big Bitcoin purchases. The coin is up 9% on the day and trading at $104 at the time of press according to CoinGecko.
LUNA has made 11% over the past fortnight and 34% over the past month. It hit an all-time high of $105.91 on the morning of March 29, marking a gain of 133% since the end of January when it plunged below $45.
LUNA has a market cap of $37 billion and the big price move has enabled it to flip Solana (SOL) to take the eighth spot in the coin cap charts.
Trusted
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
