Terra’s US$10 billion Bitcoin Bet Sends LUNA to Record High
Terra’s LUNA, the eighth largest cryptocurrency by market capitalization, reached a new all-time high of US$106.14 on Tuesday early afternoon Asia time, following a US$135 million purchase of Bitcoin.
See related story: Is Terra — whose LUNA coin is now at another all-time high — really where the smart money is?
Fast facts
Terra is a blockchain payment network that offers a suite of decentralized, algorithmic stablecoins, governed by the LUNA token. In essence, LUNA’s price increases as more Terra stablecoins are minted.
At the beginning of March, LUNA was trading under US$90 but broke out to a new all-time high of US$106.14 on Tuesday early afternoon Asia time, according to data by CoinMarketCap.
The price surge came after Terraform Labs founder and CEO Do Kwon, said the company purchased Bitcoin worth US$135 million to back the ecosystem’s stablecoins, Bloomberg reported.
The acquisition is part of Terra’s ambitions to purchase a total of US$10 billion worth of Bitcoin, and transition from an algorithmic stablecoin to a Bitcoin-backed stablecoin. According to Kwon’s tweet, this will usher in a new era of peer-to-peer electronic cash: “$UST with $10B+ in $BTC reserves will open a new monetary era of the Bitcoin standard…”
Popular entrepreneur and crypto investor Anthony Pompliano praised Terra’s Bitcoin bet via Twitter: “Every stablecoin issuer should pay attention to what Terra is doing. #Bitcoin is good for business.”
See related story: Terra founder bets millions on LUNA’s annual growth