Terra Luna just became the 19-th largest Bitcoin holder.
Currently they have just about shy of 40 000 BTC in their reserve. For those of you who are not familiar with Terra Luna, Terra is a decentralized stable coins (UST - TerraUSD). Luna is Terras native token. So the link between the 2 is Terra is a stable coin algorithmically paired with a crypto asset (Luna).This makes it different than Tether and USDC in that it is not 1:1 backed by cash/cash equivalent assets. And let's face it Tether isn't either but let's not go down that rabbit hole in this article.
So let's continue. If the price ot UST(Terra) goes above $1 this incentiveses Luna holders to sell their Luna for UST. This increases the supply of UST and drops it down to $1. If the price of UST drops too much this incentiveses UST holders to convert their tokens to Luna. This balancing act keeps things stable.
Now by adding Bitcoin and mind you Terra Luna ain't stopping at 40 000 BTC, they keep buying the stuff. Now because of the way Terra Luna is structured - controlled by code it is not backed by bitcoin. It is just loosely correlated. Some would consider this move of Terra buying bitcoin is to create more trust in Terra.
I'll leave that for you to decide. This is not a financial advice, do your own research.
Until next time.