The algorithmic stable coin Terra LUNA/USD and its token LUNA have managed to see a huge rally throughout the previous week. After hovering around $50 throughout last week, LUNA has managed to explode in value and is quickly reaching the $90 value point.
The $1 billion Bitcoin reserve backing as a catalyst for growth
On March 1, 2022, we covered how Terra LUNA’s market cap increased by 76% on a weekly basis.
On February 28, 2022, YuzuSwap announced two new pools, UST/wROSE and UST/YUZU, pools that are eligible for trade mining as well as liquidity mining rewards in both YUZ and LUNA.
Another key reason as to why Terra (LUNA) has seen such a high level of growth and gains in terms of its value is due to the announcement that Terra’s stablecoin, TerraUSD UST/USD, will be backed by a $1 billion Bitcoin reserve.
This announcement has changed LUNA’s investment status in the eyes of many crypto enthusiasts, who are now taking a bullish view of the token’s growth.
The interesting aspect about this project is that, unlike other centralized stablecoins, UST isn’t backed by the U.S. dollar but is fixed to the U.S. dollar through minting and burning of LUNA tokens.
If the price of UST manages to fall off its peg and goes under $1, for example, UST is swapped for LUNA, which is then sold for $1. The same is the case if the token goes over $1, where LUNA gets burned instead.
The introduction of the Bitcoin reserve is a key step forward, which will reduce volatility within the overall ecosystem of Terra.
Should you buy Terra (LUNA)?
On March 1, 2022, Terra (LUNA) had a value of $89.83.
To truly get an indication about this value point of the LUNA token, we will be going over its all-time high value, alongside the performance it showcased throughout the previous month.
The all-time high value of Terra (LUNA) was on December 27, 2021, when the token reached a value of $103.34.
When we go over the performance of the token throughout the previous month, Terra (LUNA) had its lowest point of value on February 3, when it decreased to $47.33
Its highest point of value was on February 28, when the token reached a value of $89.76. Here, we can see that the token increased in value by $42.43 or by 89%.
With this in mind, LUNA can reach $98 by the end of March 2022.
The post Terra price forecast: how far can the LUNA token climb by the end of March, 2022? appeared first on Invezz.
from Market Analysis – Invezz
