Terra founder plans to buy a whopping US$10 BILLION worth of Bitcoin for UST stablecoin reserves
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Do Kwon, founder of Terraform Labs and Ethereum layer 1 blockchain competitor Terra, appears to be planning to accumulate US$10 billion worth of Bitcoin (BTC) to add to the project’s stablecoin reserves.
If this eventuates as planned, there’s crypto-industry speculation this could be a significant bullrun catalyst.
At the current Bitcoin spot price, US$10 billion represents a purchase of more than 232,975 BTC. For comparison, MicroStrategy, one of the biggest Bitcoin whales in the space, holds a bit over 125,000 BTC. That said, Terra’s BTC purchasing will likely be happening gradually.
he says he’s buying $10 billion dollars worth of bitcoin
imagine not tuning in
— udiverse🔺 (@udiWertheimer) March 19, 2022
Terra has developed, in seemingly very little time, an extremely strong DeFi ecosystem largely based around its stablecoin UST and is now the leading blockchain in terms of staked value, ahead of Solana, Ethereum, Cardano, Avalanche and the rest.
Late last month, the plan to form a Bitcoin reserve for Terra’s UST stablecoin was revealed when US$1 billion from crypto-focused venture capitalists was raised for this purpose by The Luna Foundation Guard. That funding was formed from a private sale of Terra’s LUNA tokens.
Kwon then tweeted that the Terra project will keep “growing reserves until it becomes mathematically impossible for idiots to claim de-peg risk for UST”.
To that end, a US$3 billion figure was then outlined by Kwon. But that’s now been bumped up to the stupendous US$10 billion, as confirmed by one of the founder’s most recent tweets in which he described the move as a catalyst to usher in a “new monetary era of the Bitcoin standard”.
P2P electronic cash that is easier to spend and more attractive to hold #btc
— Do Kwon 🌕 (@stablekwon) March 14, 2022
According to Do Kwon, this isn’t just an idea, it’s apparently already happening. The Terra founder confirmed in an exchange with the US crypto-media outlet Cointelegraph that the project has been purchasing BTC, answering a query with simply:
“I don’t understand the distinction. We are already buying Bitcoin.”
Kiwi/American crypto influencer Lark Davis described the Terra move in a YouTube video today as “incredible” and “potentially the start of something very big for the crypto space”.
Meanwhile US investor and YouTuber Anthony Pompliano suggested that Terra is realising UST “might not best be suited for the future” as an algorithmic stablecoin backed only by supply manipulations to maintain its dollar peg.
Transitioning to a Bitcoin-backed stablecoin is a big deal, reckons Pompliano, because if Terra successfully does this and becomes a persistent buyer in the market, “they will show the playbook for central banks and stablecoins on how to back other assets with Bitcoin… this will be the standard”.
“Bitcoin is decentralised hard money… the most pristine collateral in the world,” added “Pomp”.
And finally, in other Terra-founder-related news, Kwon also recently entered a US$10 million bet with a crypto personality known as GCR, or “Gigantic Rebirth”, to the tune of $10 million over the future price of Terra (LUNA).
The bet is based on whether the price of LUNA will be higher or lower a year out from the time of the agreed wager. The upshot is, Kwon is betting that the price of LUNA will be higher than US$88, while GCR is betting against that.
And this bet actually occurred one day after Kwon finalised a smaller bet on the same terms with a different pseudonymous crypto individual known as Sensei Algod. That bet amounts to US$1 million. (Pfft… is that all?)
Both these wagers involved each party sending the funds in stablecoins to an Ethereum wallet owned by a neutral third-party, which happens to be another crypto trader and well-known identity on Twitter who goes by the name of “Cobie”.
After acknowledging he’d received the wager funds, Cobie tweeted, “May the best degen win“.
GCR, Do and Algod have all deposited to the Cobie Luna bet escrow address
May the best degen win pic.twitter.com/lhGbnHOomZ
— Cobie (@cobie) March 15, 2022