A series of large BTC purchases may greatly affect the market in the next few months, here’s how
Terra, known for its stablecoin UST, bought another large batch of BTC with a view to acquiring $125 million worth of cryptocurrency daily over the next three months. Most members of the cryptocurrency community believe that a huge buying frenzy could be the main fuel for the current Bitcoin rally, according to Bitinfocharts.
At press time, the wallet, which receives funds after each purchase, currently holds almost $1 billion worth of BTC. The previously announced $125 million purchases per day are actually being made according to the wallet’s history.
Since March 20, the wallet has grown from “only” 9,564 BTC to 21,325 BTC, with around 3,000 BTC being purchased every day. The total portfolio value is expected to reach around $11 billion by the end of the buying spree, which currently represents more than 10% of Bitcoin’s total market capitalization.
With $31 billion in daily trading volume, Terra’s $125 million purchases remove a large part of liquidity from the market.
How Can the Buying Spree Affect the Crypto Market?
Many analysts have expressed both their positive and negative views on the big buying spree that has been publicly disclosed by Terra. The main problem the market might face with this rally is the lack of liquidity caused by the withdrawal of more than one hundred thousand BTC from cryptocurrency exchanges.
Since the beginning of 2021, exchanges are facing massive outflows, which may become a reason for a supply shock if the market gets hit with another series of large purchases as we noticed in the last year. In the end, Terra is expected to own over 200,000 BTC if the price of the first cryptocurrency remains under $50,000.
