Terra (LUNA) founder Do Kwon’s plan to partly back the stablecoin UST with bitcoin (BTC) is causing both excitement and concern in the community, with some fearing what could happen to the bitcoin market if Terra faces problems with trust or liquidity.
“I remind you that UST is awesome when it's buying USD 3b worth of BTC and saving the market,” Alan Eschweiler, chief revenue officer at crypto trading bot provider Stacked said in a Tweet, before adding:
“I also remind you it will be the bane of your existence when UST loses peg and we have the biggest forced seller of BTC in history.”
More optimistic about Terra’s move was Julian Liniger, co-founder and CEO of the Swiss bitcoin broker Relai, who said it is “overall a promising development” that institutions from both crypto and traditional finance are starting to buy and hold BTC.
“It validates the trend towards bitcoin being viewed as a reserve and store of value asset,” Liniger said in an emailed comment.
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