Terra has started purchasing $10 billion worth of Bitcoin to use as a reserve.
According to blockchain search and analysis engine Blockchair, Terra purchased 5,934 BTC for approximately $260 million between March 20 and March 24 as part of its gradual accumulation plan for the said asset.
As of Saturday, March 26, the network had accumulated a total of 15,390.9 BTC, bringing its total holdings to 24,954.95 BTC ($1,108,077,140.35). Terra, which is now the 40th largest BTC holder in the world, plans to wrap and deposit Cosmos in smart contracts that support the algorithmic UST stable coin, with more purchases to come.
The purchase comes days after Do Kwon, founder of Terra and Terraform Labs, announced that his company planned to buy $10 billion worth of Bitcoin to support its UST stablecoin as part of its larger strategy to decouple from Bitcoin. centralized stablecoins and at the same time a more “sustainable and organic stable coin.
However, the plan to form a Bitcoin reserve for Terra’s UST is in the works, and last month the Luna Foundation raised $1 billion for this purpose through a private sale of LUNA tokens.
After the event, Kwon stated that Terra would continue to pile up his reserves “until it becomes mathematically impossible for idiots to claim the peg risk for UST”. He then outlined a $3 billion investment plan in Bitcoin before raising the bar to $10 billion. If Kwon’s purchase comes to fruition, it would mean buying more than 232,018.50 BTC (at current prices), which is nearly double what MicroStrategy has in store.
However, given the large sums involved, it is enough to believe that the purchases will be rolled out gradually, ushering in a “new monetary era of the Bitcoin standard”.
Over the past two months, Terra’s ecosystem has moved the DeFi wave and came out exceptionally strong thanks to the attractive UST stablecoin. As ZyCrypto reported, the ecosystem has recently toppled Solana, Ethereum, Cardano, and Avalanche, becoming the most staked blockchain.
“One of the fastest-growing categories of applications on Terra is neobanks that use stable coin rails to make transactions easier and expose people to structured returns defying,” Kwon said in a podcast with ‘Udiverse’ on Tuesday.
That said, the $10 billion purchase of Bitcoin could trigger a bullish run for the crypto assets as Terra continues to accumulate with no intention of selling. As mentioned, the process, which will be gradual, could also give Terra some much-needed attention, signaling a strong move for its parent currency LUNA, which is currently trading at $90, up 110% over the past fifty days.