Terra price gains 75% in February as $2.57B in LUNA tokens removed from supply
Terra (LUNA) emerged as one of the best performing financial assets in February, a month mired by geopolitical conflicts and their negative impacts on the crypto market.
LUNA's price surged by a little over 75% to reach $91.50 at the month's UTC close. In comparison, the percentage performance of other top tokens, mainly Bitcoin (BTC) and Ether (ETH), in the same period came out to be around 12.25% and 9%, respectively.
Interestingly, most of LUNA's gains in February surfaced on the month's last day. The Terra token jumped 26% on Feb. 28, in part due to similar upside moves elsewhere in the crypto market. For instance, BTC and ETH rose 14.50% and over 11.50%, respectively, on the same day.
While still positive at 0.09, LUNA's correlation with Bitcoin has come off lately after hitting 0.81 on Feb. 21, data from TradingView shows. A correlation of 1 means that two assets are in lockstep, while 0 shows that their price moves independently.
Terra's LUNA/BTC pair also showed its growing valuation against the top cryptocurrency.
In detail, the LUNA/BTC pair rose by over 56% to 21,171 satoshis in February, suggesting traders sought hedge in the Terra token as Bitcoin's correlation with a bearish stock market grew, reaching 0.70 earlier this year.
As to why traders appeared to have considered LUNA as their interim safe haven in the first place, the answer might lie in Terra's token economics.
Data fetched by analytics platform Smart Stake showed that Terra protocol burned 29 million LUNA tokens worth $2.57 billion recently. That happened as the supply of TerraUSD (UST), a stablecoin backed not by the U.S. dollar but LUNA, increased from around 11.26 million on Feb. 1 to almost 12.92 million on Feb. 28, marking an increase of nearly
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