Terra’s co-founder Do Kwon took to Twitter to announce the purchase of another $100 million in Bitcoin. The LFG’s Bitcoin wallet now holds 42,406 Bitcoins worth $1.7 billion. Terra finalised a $176 million acquisition earlier this week. In late February, the company raised $1 billion in a private token sale with the support of 3AC and Jump Crypto. In addition, to maintain the native UST stablecoins dollar peg, a massive Bitcoin-based reserve fund was formed.
The price stability of stablecoins like Tether (USDT) and Circle’s USD Coin (USDC), the two most popular, is guaranteed by major parties. On the other hand, Terra’s UST is completely decentralised. As a result, users can create UST tokens by destroying LUNA tokens in order to keep the value of the most important algorithmic stablecoins at $1.
In June of this year, Iron Finance’s (IRON) algorithmic stablecoin lost its peg and plunged to almost zero. The UST has also dipped below $1 on multiple occasions due to market volatility. The nascent stablecoin, on the other hand, should be able to withstand any substantial market decline because of the massive Bitcoin reserve.
Terra’s huge purchases are no longer able to support Bitcoin’s price. The greatest market capitalization token is now trading below $40,000. Last week, LFG bought Avalanche (AVAX) coins for $100 million to diversify its portfolio. According to CMC, the Terra price is $87.22 USD today, with a 24-hour trading volume of $2,099,479,930 USD. Terra had gained 1.86 percent in the previous 24 hours.
Read more: Do Kwon launches a novel Curve pool that features major stablecoins
