zycrypto.com
LUNA, the native cryptocurrency of the DeFi-centric Layer 1 blockchain protocol Terra, has surged in the past 24 hours to smash a new record high of nearly $110 thanks to the broader crypto market resurgence and the Luna Foundation Guard’s (LFG) bitcoin accumulation spree.
Terra’s LUNA Sets Another All-Time High
LUNA is on a tear.
The rapidly-growing token has rallied by over 10% to hit a price of $109.66 for the first time today, breaking the previous high of $104.73. LUNA is currently the world’s eighth-most valuable cryptocurrency with a market cap of $38.5 billion.
It has since retraced slightly to settle at around $108.37 at press time. However, it’s still up roughly 8.7% on the day. This is a significant feat given that it was trading at around $70 at the beginning of the month.
Terra is a cryptocurrency network built using the Cosmos software development kit (SDK). The project has attracted considerable attention of late due to the Luna Foundation Guard (LFG), a Singapore-based nonprofit, purchasing bitcoin to stabilize Terra’s flagship stablecoin UST. On Monday, the LFG purchased an additional $135 million worth of BTC in four batches.
Terra Keeps Stacking Bitcoin
Terra has become a persistent buyer of bitcoin. Speaking to Bloomberg Monday, Do Kwon, the CEO of LFG and Terraform Labs, confirmed that the company had snapped up over $1 billion in BTC since the end of January.
At publication time, the bitcoin address of the Luna Foundation Guard holds 27,784.96954740 BTC — equivalent to $1.32 billion at the prevailing market prices.
Terra utilizes a dual token mechanism to keep its algorithmic stablecoin UST pegged to the US dollar. This means Terra users must burn $1 worth of LUNA for every new UST minted. Without enough collateral backing, the stablecoin risks crashing. This is why LFG is accumulating BTC in its reserve fund.
“The reason why we are particularly interested in Bitcoin is because we believe that is the strongest digital reserve asset. UST is going to be the first internet native currency that implements the Bitcoin standard as part of its monetary policy,” Kwon explained earlier this month.
According to the Korean entrepreneur, the plan is to boost LFG’s Bitcoin reserves to $3 billion, with a long-term goal to create a $10 billion fund. LUNA will likely continue exploding higher as LFG continues to buy bitcoin.