The Luna Foundation has purchased an additional 2,943 BTC, worth about $139 million, for its UST reserve. The bitcoin address for the Luna Foundation Guard (LFG) shows the purchase, and that the total BTC now stands at over 30,000.
The Luna Foundation Guard has said in the past that it is considering purchasing as much as $10 billion worth of BTC for its UST stablecoin reserve. Currently, that figure is just under $1.5 billion.
Terraform Labs co-founder Do Kwon said that he expects the company to become the second-largest holder of bitcoin, outside of Satoshi Nakamoto. That is a tall order and will require Terraform Labs to buy much more bitcoin. But it appears that they are determined to do so by recent purchases.
In a recent interview, Do Kwon spoke on a lot of subjects related to the project, DeFi, and stablecoins. Talking about the latter, he said that stablecoins are necessary because people prefer to use fiat currency, saying,
“Stablecoins are important because they facilitate a ton of different transactions that volatile currencies like luna, solana, or bitcoin cannot… Stablecoins today are, in my opinion, the strongest application and use case in all of crypto.”
And UST’s growth appears to be mirroring that sentiment. The stablecoin has made tremendous progress in the past six months, and could even challenge some of the market’s most entrenched stablecoins.
Can UST Challenge Other Stablecoins?
UST is a stablecoin that has had its fair share of controversies. Many in the market don’t believe that the LUNA and UST relationship is sustainable. This even led to Do Kwon accepting a $10 million and $1 million bet from a market investor, who said that LUNA’s price would be down from its current valuation a year from now.
But the market cap of UST has risen exponentially in recent months. Year to date, that figure has gone up by 55%, compared to only 5.7% of DAI, which is one of the market’s most popular stablecoins. DAI has a market cap of $9.2 billion and UST has a market cap of $16.3 billion.
It is only in recent months that UST has picked up so significantly. After it became the most staked asset due to high rewards, LUNA’s price rose by over 23%. Those kinds of headlines are fueling more investment in the asset and, with more developments around the corner, that figure could go even higher.