- Terra’s LUNA has hit a new high today at $106 after gaining 10 percent overnight while Bitcoin has hit $48,000 for the first time in nearly three months.
- This follows the purchase of $135 million in BTC by Terraform Labs, the company led by Do Kwon and which is behind the development of the Terra blockchain network.
After months of sideways trading and unsustained bullish rallies, Bitcoin has once again traded above $48,000 today for the first time in nearly three months. Terra has a lot to do with Bitcoin’s gains, and its native token LUNA has been a big gainer as well, clocking a new record high.
At press time, BTC is trading at $47,918, up by a marginal 1.6 percent in the past day. In that time, it set an intra-day high of $48,086, the first time it has traded above $48,000 since December 31, three months ago. In that time, Bitcoin has sunk to a low of $28,000 before rebounding to trade at a range between $38,000 and $45,000. The crypto is still 30 percent below its November all-time high at $68,680.
Commenting on Bitcoin’s resilience and latest breakout, Bitcoin IRA co-founder Chris Kline stated:
Throughout the last six months, crypto has shown its resilience and relevancy, even as strong macroeconomic headwinds have disrupted traditional markets by remaining within range. Now, crypto is center stage with its biggest opportunity to shine.
Alexander Mamasidikov, co-founder of the mobile digital bank MinePlex noted that we are on the ascendency in BTC price and investors don’t want to be left.
He stated, “The ongoing capital splash into the digital currency is a sign that investors do not want to take a back seat in a price movement that could push bitcoin to a height not seen since November 2021.”
Terra LUNA shoots to the moon, pledges $10B to Bitcoin
As Bitcoin gained ground and erased losses for the year, LUNA, the native token of the Terra blockchain, was the standount performer on the charts.
At press time, LUNA is trading $103.17, up by 10.12 percent in that time. The token set a new record high of $106 in the past day as its impressive rally continues.
The LUNA breakout comes after Do Kwon, the founder of Terraform Labs (which is the company behind the Terra blockchain) revealed that the firm is making a $10 billion bet on Bitcoin. Yesterday, March 28, the company snapped up $135 million in BTC, adding on to other purchases it has been making since late January.
At press time, Terraform Labs owns 27,784.96954740 BTC, worth $1.33 billion at current prices through the Singapore-based Luna Foundation Guard.
The purchase is part of Kwon’s plan to have UST, the native stablecoin of the Terra blockchain, adopt the Bitcoin Standard (which is basically backing an asset with Bitcoin).
Currently, Kwon has $3 billion ready to snap up more BTC, but he revealed a week ago that the infrastructure to support the purchases is still not ready.
It's not 10B today – as UST money supply grows a portion of the seigniorage will go to build BTC reserves bridged to the Terra chain
We have 3B funds ready to seed this reserve, but technical infrastructure (bridges etc) is still not ready yet.
— Do Kwon ? (@stablekwon) March 22, 2022
The BTC purchase is part of Kwon’s effort to respond to criticism of the UST stablecoin’s backing. Unlike Tether which is (supposedly) backed 1:1 by US dollars, UST isn’t. Rather, it’s backed by an algorithmic issuance and destruction of LUNA tokens on the Terra network, such that when 1 UST is bought, $1 worth of LUNA is burned permanently.
Kwon explained to Bloomberg:
The reason why we are particularly interested in Bitcoin is because we believe that 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.