Terra has reportedly bought another 2,943 BTC worth about $139 million at today’s prices. This purchase comes hot on the heels of Terraform Labs Co-Founder and CEO Do Kwon, making public plans to back their UST stablecoin with a BTC reserve instead of the US Dollar.
Tether Makes a Step Towards Improving UST
UST will break new ground as the first cryptocurrency to incorporate the BTC standard into its monetary policy. In an interview with Bloomberg regarding the move, Do Kwon stated:
“We are particularly interested in Bitcoin because we believe that it is the strongest digital asset.”
Since March 20, Terra has reportedly bought nearly 3,000 BTC every day, and the company’s wallet bears witness to this. As at March 20, the wallet had 9,564 BTC, but now holds well in excess of 30,000 coins valued at just north of $1.5 billion.
According to Kwon, Terra has set aside $3 billion for BTC accumulation in the next three months. The company hopes to eventually have a bitcoin holding second only to Satoshi Nakamoto’s.
HODLers Like Terra are Shaping Bitcoin’s Illiquid Supply
Terra’s recent purchases have removed a large part of the liquidity from the market. This could be one of the factors contributing to BTC’s illiquid supply going parabolic, as noted in a tweet posted on Wednesday by a leading BTC commentator, Bitcoin Archive.
This turn of events means that the supply of Bitcoin in the hands of large-volume hodlers such as Terra is now much higher than what is on exchanges.
And as large-volume hodlers like Terra continue to vacuum up BTC and use it more as a store of value rather than a medium of exchange, analysts expect that the percentage of BTC held as illiquid supply will continue to grow in a parabolic fashion going forward. In fact, it is estimated that by 3026, which will be the year of Bitcoin’s seventh halving, illiquid supply will make up at least 80% of BTC’s circulating supply.
Currently, Bitcoin’s illiquid supply stands at about 14.4 million of the 18,998,168 BTC in circulation. That number translates to just above 76% of the cryptocurrency circulating supply.
Bitcoin Prices to Benefit From Terra’s Continued Activities in the Market
Terra’s ambition to grow its BTC reserves to the tune of at least $10 billion is expected to significantly boost the price of the number one crypto going forward. The past week has seen Bitcoin’s trading channel constrict further to a range between $42k and $47k.
At the time of writing, Bitcoin was trading at $47,124 and had posted a trading volume of over $31 billion in the last 24 hours. The cryptocurrency has a current market cap of nearly $897 billion.
Source: https://crypto.news/terra-purchases-2934-btc-139-million-increasing-illiquid-supply-bitcoin/