Terra’s LUNA Hits New ATH Following $135M BTC Buy
Terra saw its native token LUNA hitting a new ATH after the project’s CEO and founder revealed the network purchased more than $1 billion in $BTC since January.
Terra’s LUNA leads today’s gainers in the cryptocurrency market. The altcoin gained over 10% early Tuesday to hit another record peak of $106.14 (Coinmarketcap data). Though LUNA slightly retraced after that, it remains near 9% up on the day, changing hands near $103.50 at this publication.
LUNA’s market capitalization hovers at $36.8 billion, ranking 8th in the crypto-list by value. It is among the native tokens by the Terra network, which also hosts decentralized stablecoins. TerraUSD (UST), boasting $16.2 billion in market cap, is among the most popular stablecoin by the blockchain platform, ranking above MakerDAO’s DAI.
Latest LUNA price actions likely relays to the updates that LFG (Luna Foundation Guard) recently bought BTC worth $135 million to support the stablecoin UST. LFG is a non-profit organization based in Singapore which supports the Terra blockchain.
Terra’s BTV Reserve
As Bloomberg reports show, the Monday purchase came in four bunches, with LFG CEO and Terraform Lab’s founder (Do Kwon) announcing that the network had purchased over $1 billion in BTC since January’s end.
While publishing this blog, LFG’s $BTC address had 27,784.9 Bitcoin (approximately $1.32 billion). Unlike centralized stablecoins such as USDT, UST is not greenback supported. Instead, it is LUNA tied, meaning users burn LUNA with each TerraUSD mint.
Kwon trusts the BTC reserve in enhance UST’s ability to ensure its dollar peg. The executive had also told Bloomberg that they selected Bitcoin since it is the most solid crypto reserve. He added that TerraUSD would be the first native coin to implement Bitcoin’s standard in its fiscal policy.
Last month, LUNA Foundation Guard revealed raising $1 billion in LUNA private coin sales. Repots suggests the platform will use the funds for UST’s reserve denominated in BTC. LUNA surged 7.7% overnight as the Terra ecosystem saw surged demand. The alt now joins top-performing alts within two years since 2020 March.
Analysts examined Terra’s price moves and noted a breakout from a symmetrical triangle. A recognized cryptocurrency analyst @ali-charts trusts a close beyond $97.50 will see LUNA to $122. Also, @CryptoFaibik observed an optimistic pennant setup in LUNA’s price chart. The pattern might trigger a bullish breakout to push the token 40% higher.
Editorial credit: Casimiro PT / shutterstock.com
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