The non-profit organization backing Terra blockchain protocol, Luna Foundation Guard, has today made another Bitcoin purchase.
The foundation seemingly took advantage of the retracing Bitcoin price to scoop up more of the coins. Bitcoin (BTC) shed more than $2,500 in 12 hours between yesterday and today, slipping from a 24-hr high of $47,106 t0 $44,669 – its lowest price figure since last Friday.
Data from analytics platform BitInfoCharts shows the balance in the LUNA LFG wallet stands at 35,767.98 BTC. The last transaction came today in three deposits of 3,964 BTC, 586 BTC, and 490 BTC, respectively.
A chart showing the series of buy-in action
The LFG spent around $230 million to complete this buy, as per a shared tweet.
More to follow, but not everyone likes the idea
On Monday, Terraform Labs’ CEO Do Kwon revealed in a Bloomberg interview that the buying action was only getting started and the LFG will continue with more purchases to complete the ‘decentralized Forex reserve.’ While Terra intends to keep buying in perpetuity, future acquisitions will hinge on the amount of UST minted.
“… This is not a corporate treasury decision in the sense that I am not buying Bitcoin. I’ve already donated money so that we can build up these reserves on behalf of the community and we plan to be doing this in perpetuity […] So the $3 billion or so that we’re buying initially to bootstrap the reserves is going to be followed up by persistent buys of Bitcoin through UST seniorage.”
This ambitious plan hasn’t gone down well with everyone in the industry. Many concerns and questions have been raised over the last few days. Bitcoin critic and renowned stock broker Peter Schiff is one of the names to recently have found fault with the idea of a USD pegged stablecoin having Bitcoin as collateral.
“Terra’s plan to back a U.S. dollar stable coin with $10 billion worth of Bitcoin makes no sense. Neither does announcing a major purchase before it’s mad […] This is just another attempt to pump more air into the Bitcoin bubble!” he wrote on Twitter last Wednesday.
Do Kwon responded to the post, arguing Bitcoin is neutral and thus qualifies as a reserve asset. The Terra chief added that neither him nor Terra had the power to influence the coin.
“Bitcoin is neutral, it cares not what I nor anyone else thinks, and it is mighty […] Purchasing significant amounts of bitcoin creates information asymmetry between insiders (prof traders & desks) and everyone else. _I_ am not buying bitcoin, the reserve is for the communities of users that use UST – numbering in the millions.”
Notably, the move by Terra comes on the heels of a massive Bitcoin purchase by the world’s largest Bitcoin holding company MicroStrategy. The business intelligence and cloud service provider on Tuesday confirmed that through its MacroStrategy subsidiary, it had added 4,167 coins at $190 million, taking the cumulative figure to 129,218 BTC.
Could LFG compete with MicroStrategy as the largest BTC holder?
The LFG wallet balance shows Terra ecosystem could rival MicroStrategy in terms of the Satoshi coin ownership as it advances with the plan to back its TerraUSD stablecoin to Bitcoin. The eventual goal is to establish a $10 billion BTC reverse and Terra has set its initial target at nearly a third.
LFG has so far spent $1.622 billion as per the wallet data, making a $110,362,355 million profit from the coin’s price change so far. If it goes forward with the plan successfully using the allocation left and at a per coin price of $45,000, it will have roughly 185,000 BTC more.
However, contrary to the last time Terra bought more of the Satoshi coin, the flagship crypto hasn’t seen any upward momentum in the market. Markedly, even the MicroStrategy splurge earlier this week didn’t influence the coin’s market value. The leading crypto asset has retraced after two days of trading flat. Terra’s native token LUNA, on the other hand, has continued trading above $110 despite recording a series of dips and climbs in the last few hours.
LUNA/USD trading chart
At the time of writing, LUNA was spotted changing hands at $115– down 3.36% from its all-time high notched during yesterday’s trading session.
To learn more about this token visit our Investing in Terra LUNA guide.
The post Terra LFG Follows MicroStrategy in Making Another Bitcoin Buy appeared first on Securities.io.
