Terra has emerged as one of the best-performing digital assets in recent weeks, with its price-performance surpassing the majority of its competitors.
The network made an unexpected announcement lately via its CEO, Do Kwon, who claimed that they would be acquiring $10 billion in Bitcoin for the Luna reserve.
Terra will use the bought Bitcoin as a reserve for its popular algorithmic stablecoin, UST, according to Kwon’s announcement.
It has now been reported that the network has made its first acquisition, less than two weeks following its launch. Lark Davis, a popular crypto influencer, stated on Twitter that Luna had acquired $125 million in Bitcoin.
While this purchase represents a fraction of the entire amount stated by the creator, it demonstrates the network’s belief in the coin as digital gold in comparison to fiat currency and its physical equivalent, gold.
Apart from that, the Luna Foundation Guard (LFG) announced last month that it was able to gather $1 billion to create its Bitcoin reserve. According to Matthew Dibb of Stack Funds, this was a wise decision that would result in less UST volatility.
Many in the crypto industry have questioned Terra’s Bitcoin acquisition, with many wondering whether acquiring the flagship digital currency rather than supporting an asset inside its ecosystem was the proper decision.