{"id":909,"date":"2022-05-09T13:01:42","date_gmt":"2022-05-09T13:01:42","guid":{"rendered":"https:\/\/digitalcoinprice.com\/blog\/?p=909"},"modified":"2022-05-09T13:01:42","modified_gmt":"2022-05-09T13:01:42","slug":"terra-to-ust-if-btc-value-crashes","status":"publish","type":"post","link":"https:\/\/digitalcoinprice.com\/blog\/terra-to-ust-if-btc-value-crashes","title":{"rendered":"Terra founder explains what happens to UST if BTC value crashes"},"content":{"rendered":"

Terra crypto founder, Do Kwon, talked about the future of the stablecoin company should a Bitcoin crash occur. The UST crypto developers have gone up to the eye of the mainstream due to the clamouring for stablecoins as a direct response to the volatility of Bitcoin price on exchanges such as <\/span>Redot crypto exchange<\/span><\/a>. While some crypto investors might be panicked about the BTC crypto crashing, Kwon took a different view. Despite admitting that a Bitcoin crash would be a negative when considering the trust people have in the coin and the stability of the UST crypto, he also made sure to point out that he believed that Bitcoin\u2019s price would go up again.<\/span><\/p>\n

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UST is a Terra crypto made by Terraform Labs as an alternative digital asset and solution to the unpredictability of the Bitcoin price and those of other altcoins. It has quickly spearheaded the rise of stablecoins to the mainstream and reignited the people\u2019s belief in cryptos. However, with the Bitcoin price crash seemingly a possibility, many people have started to question if all this uncertainty is worth their time or money. With the current state of many economies and geopolitical situations going on in the world, and at the tail-end of a global pandemic, many individuals are really considering whether they wish to keep purchasing BTC, UST, or both. Kwon, though, believes that the issue is just a short-term one and soon, BTC\u2019s value will start trending back in a bull direction again.<\/span><\/p>\n

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The popular digital currency, BTC, has undergone a bearish trend this year on the exchange sites like Redot, and other than a few momentary spikes here and there, the downward fall hasn\u2019t stopped. This is making people nervous, especially those who invested in the popular coin when it was at its highest value. Kwon\u2019s statements were balanced as he was both realistic about the negative impact Bitcoin\u2019s price crash would have on Terra crypto without being pessimistic. The Terra crypto founder talked about this in an interview on a podcast after the host inquired about what a Bitcoin crash would cause when the company has so much of it in reserve.<\/span><\/p>\n

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Terraform Labs intends on purchasing a whopping $3 billion BTC to back up its UST crypto since stablecoins need to be backed by something of value – some stablecoins use gold, some use fiat currency, and some use other cryptocurrencies. Kwon further talked about the worst-case scenario would be a reduced demand for their stablecoin in the case of a crash of the BTC crypto price. He added that the situation he just laid out doesn\u2019t leave him sleep-deprived. He said that he was more focused on the long game and believed that BTC\u2019s price would go up as time went on. Kwon assured that the BTC reserve in his company\u2019s possession was enough to withstand the reduction in demand for UST by crypto investors.<\/span><\/p>\n

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UST is backed 40% by Bitcoin which is why Terra has been acquiring large amounts of BTC as collateral. As things stand, the company has accrued over 30,000 BTC in value and even bought another 2,943 BTC a couple of days ago. Terra has purchased so much Bitcoin that it is now the third-largest Bitcoin single-wallet owner. Danku_r, a crypto enthusiast on YouTube, made the argument that adding more BTC to Terra\u2019s reserves will be good for the company and those having UST as it aids in easing the negatives that come with a sharp reduction in UST demand. It was also added by him that this business choice by Terra could help avoid a horrible cycle that comes from mistrust of the crypto market at the moment because Terra\u2019s treasury might just take in the shrinking supply of UST.<\/span><\/p>\n

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Terra Crypto Founder Had Some Controversial Thoughts on Layer-2<\/span><\/h2>\n

Terra crypto\u2019s founder had more to say about his company and discussed his objectives regarding the treasury. He said the treasury is aimed at making Terra the number 1 single-wallet holder of Bitcoin. So, be sure to see more purchases of Bitcoin from the company as they try to move up from third to first and unseat MicroStrategy. Based on a tracker of Bitcoin wallets, Terra would have to buy 125,052 BTC to become the undisputed number 1 owner of BTC among single wallets. Kwon, known to be quite the instigator, eventually stated that Terra should be considered a layer-2 solution for the Bitcoin ecosystem. He went on to say that Terra allows Bitcoin to have a connection letting it be utilised in DApps such as DeFi and NFTs. Kwon noted that all the transaction capabilities inaccessible to Bitcoin when it comes to DeFI can be done on the Terra platform.<\/span><\/p>\n

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The founder of Stacks, a solution for scalability on the Bitcoin platform, did not take kindly to Kwon\u2019s assertions, though, He informed that Stacks already enjoys the security of Bitcoin due to the transfers done on the network but Terra would require a restructure at a high level to be a layer-2 platform for Bitcoin. He continued by giving Kwon props for valuing Bitcoin as a layer but noted that Terra is a different blockchain from BTC which meant the structure they implement in buying and keeping Bitcoin is more manual.\u00a0<\/span><\/p>\n

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It wasn\u2019t only Stacks that seemed to counter the Terra founder\u2019s statements, but others as well. Antiprosynthesis responded to the controversial claim by inquiring if everyone that utilises BTC as collateral for their stablecoins ought to be seen as layer-2 solutions too. The ETH developer added that he didn\u2019t even buy into the idea that Bitcoin is as aged in its structure as some others think. The purpose of layer-2 solutions is to aid layer-1 blockchain ecosystems to have more scalability when executing commands through several transfers to another network in a bid to minimise crowding. Bitcoin price is currently at $44,463 which is an over 5% fall in the past day.\u00a0<\/span><\/p>\n

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Terra crypto founder, Do Kwon, talked about the future of the stablecoin company should a Bitcoin crash occur. The UST crypto developers have gone up to the eye of the mainstream due to the clamouring for stablecoins as a direct response to the volatility of Bitcoin price on exchanges such as Redot crypto exchange. While […]<\/p>\n","protected":false},"author":1,"featured_media":910,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-909","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news-updates"],"_links":{"self":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts\/909","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/comments?post=909"}],"version-history":[{"count":1,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts\/909\/revisions"}],"predecessor-version":[{"id":911,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts\/909\/revisions\/911"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/media\/910"}],"wp:attachment":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/media?parent=909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/categories?post=909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/tags?post=909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}