- As Bitcoin continues to popularize, companies and individuals are increasingly turning to it as a store of value. One such company is Terra, which has amassed a cache of 42,500 BTC. This puts it in second place behind MicroStrategy, which has amassed a total of 90,000 BTC.
- Terra’s accumulation of Bitcoin is part of its larger strategy of becoming a major player in the digital currency space. In addition to its Bitcoin holdings, Terra also has a significant presence in the Ethereum ecosystem.
It is one of the largest providers of Ethereum-based Stablecoins, which are digital currencies that are pegged to the value of traditional fiat currencies. Terra’s accumulation of Bitcoin is part of a larger trend of companies.
What Caused this Move?
- The move comes hot on the heels of another major institutional BTC purchase, this time from software firm MicroStrategy, which announced last week that it had bought 38,250 BTC for $425 million.
- With both Terra and MicroStrategy now holding significant amounts of BTC, it seems that the institutional interest in Bitcoin is only growing. This is likely to result in even more mainstream adoption of the cryptocurrency in the future.
- While many investors are worried about the potential for a bubble, others see this as a sign of Bitcoin finally hitting its stride as a mainstream asset. Only time will tell how this plays out, but for now, it appears that Terra is in a good position to capitalize on the current market conditions.
Why Is Terra Loading Up on Bitcoin?
- To the uninformed, Terra’s purchase of Bitcoins might come as a huge surprise but a closer look reveals the brains behind the move. The purchases are part of Kwon’s plans to back UST with Layer-1 assets with Bitcoin taking the lion’s share.
“We’re big believers of Bitcoin, so we’re just going to continue to buy whenever there’s an opportunity to,” he said. “Over time, Terra is going to be backed by a basket of the top Layer 1 assets.”
- This would give UST the status of a hybrid Stablecoins that will allow users to trade $1 of UST for $0.99 worth of BTC. Kwon stated that it is difficult for Bitcoin to be questioned and the crypto “is the only hard reserve asset that’s been proven out of the digital currencies”.
- Aside from the Bitcoin purchasing spree, Terra has been loading up on Avalanche with a ground-breaking purchase of $200 million worth of AVAX. Kwon said the choice of AVAX was an easy one because of the stellar growth of its ecosystem and the loyalty of the community around the blockchain.