- On-chain data suggests that Terra has purchased nearly $1.5 billion worth of BTC.
- Terra wants to adopt the bitcoin standard to make UST a hybrid stablecoin.
- Amid talk of the accumulations, Bitcoin is holding steady above $45k as it shakes off previous lows.
Terra wants to cement its place as one of the largest BTC holders in the world. CEO Do Kwon stated that the organization has a budget of $10 billion to make the splurge.
Terra’s New Affinity With Bitcoin
Terra has purchased $1.4 billion worth of Bitcoin which makes it the 30th largest single holder of the cryptocurrency. The recent purchase gives the company a holding of 30,727 bitcoins with even larger purchases being lined up.
“The Terra Protocol will be one of the largest holders of $BTC. Saylor beware,” tweeted Do Kwon, founder of Terra.
Michael Saylor’s MicroStrategy is one of the largest BTC whales with over 129,218 BTC in its cache following its latest purchase of 4167 BTC announced today. MicroStrategy’s bitcoin stash is now valued at around $5.9 billion.
Kwon’s reason for the purchase of a large cache of BTC was shared in a Twitter space hosted by Udi Wertheimer. In the space, Kwon stated that the decentralized stablecoin UST would transform into a hybrid stablecoin that will allow users to exchange $1 worth of UST for $0.99 worth of BTC.
The choice of Bitcoin for Kwon was an easy one because of the credibility that it has earned over the years. He added that “it is very difficult for somebody in crypto to question Bitcoin. According to the founder, the company had earmarked the sum of $3 billion to purchase BTC in the short term while the future will see the Luna Foundation Guard (LFG) splurge up to $7 billion in Bitcoin purchases.
Following the blossoming ecosystem, Terra climbed by a staggering 6.50% to near the $120 mark. The asset reached its all-time highest point at $199 and has continued to experience a flurry of activity as transaction volumes spiked.
Why Is Terra Turning To BTC
Terra’s founder has been pro-Bitcoin and the company’s recent move does not come as a surprise to industry pundits. He once stated that “$UST with $10B in $BTC reserves will open a new monetary era of the Bitcoin standard. P2P electronic cash that is easier to spend and more attractive to hold.”
By making UST a hybrid stablecoin, Terra now allows UST to be exchanged for BTC natively without meddling intermediaries. Conversion fees are at a negligible rate with 10,000 UST being converted to BTC for around $2.58.
This adds cream to the talk of UST’s interoperability and Erik Voorhees has described the move as being a “giant step forward for crypto”. The company has stated that it intends to maintain UST’s peg to the dollar by using BTC as an indirect peg by leveraging Bitcoin’s status as a leading cryptocurrency to maintain confidence amongst users.