Bitcoin vs Terra Luna: Which Crypto Should You Buy In 2022

BTC vs LUNA: Which One Should Be In Your Portfolio?

Last Updated March 24th 2022
18 Min Read

Bitcoin and Terra Luna were both developed to disrupt the world of traditional finance and both have gathered an impressive network of supporters in recent years - but which one presents the better opportunity for investment in 2022?

It’s probably fair to say that Terra Luna is the more sophisticated of the two projects, as it offers a much wider financial ecosystem than Bitcoin, which is more or less limited to a means of value exchange. However, make no mistake about it - Bitcoin is still the world’s most famous and most valuable cryptocurrency. 

But will 2022 be the year that things change? The last 12 months have been an exciting time for the cryptocurrency market, with several new altcoins - and even the odd meme coin - entering the top ten tokens by market capitalisation. In terms of investment, many of these tokens offered higher a percentage of returns than BTC. This has prompted investors to begin scouring the market for projects that are likely to explode over the coming year.  

In the following Bitcoin vs Terra Luna comparison, we’ll take a closer look at each project and see what analysts are predicting for their respective price movements in 2022. We’ll also hear from industry experts regarding their opinions of both Bitcoin and Terra, as well as consider whether these tokens may actually complement one another as part of a diversified portfolio. 

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Bitcoin vs Terra - The Fundamentals

Bitcoin vs Terra Luna image

As we’ve noted, Bitcoin is the world’s most famous and valuable cryptocurrency in terms of market capitalisation - but it’s also the oldest and compared with newer projects, such as Terra Luna, the technology behind it is starting to look a little dated. To the casual observer, this may make it seem as though LUNA has a brighter future, but it should be remembered that Bitcoin has seen off competition from plenty of projects that, on paper at least, are more advanced. 

Nonetheless, understanding the key differences between these two projects can help to see how they might fit into your investment portfolio. 

Bitcoin (BTC)

Background

Bitcoin was the first truly viable cryptocurrency, launched in 2009 following the release of a whitepaper by the pseudonymous Satoshi Nakamoto. The technology behind Bitcoin was revolutionary at the time and BTC soon garnered a reputation for offering significant returns for investors. 

Originally touted as a digital alternative to cash, it's fair to say that Bitcoin has not been widely adopted as an everyday method of payment. Instead, Bitcoin is now seen as a means of storing value and remains one of the most popular tokens for cryptocurrency investment - with backing from several prominent institutional investors. 

Bitcoin cannot support DeFi or NFTs and may suffer from scalability issues, but it remains the yardstick against which the wider cryptocurrency market is measured. As such, it is still considered to be an essential addition to any cryptocurrency investment portfolio heading into 2022. 

Transactions and Speed

Bitcoin’s transaction speeds are relatively sluggish by today’s standard - at around five per second. In addition, the Bitcoin blockchain requires a huge amount of resources to maintain, which has raised environmental questions and led many to doubt that BTC will ever be a truly viable means of retail payment.

The reason for all this is that Bitcoin relies on the Proof-of-Work consensus mechanism, wherein miners must compete to solve equations and verify blocks. This requires a phenomenal amount of computing power and is a much slower process when compared with the latest Proof-of-Stake protocols. 

Bitcoin can’t hope to compete with Terra Luna when it comes to transaction fees. However, the reality is that the original cryptocurrency was surpassed in this area several years ago now (Ethereum, for example, launched in 2016) and this has yet to harm its prospects as an investment opportunity. 

Supply and Demand

Bitcoin has a total supply cap of 21 million tokens. New tokens are released into the system in the form of rewards for the aforementioned miners. At the time of writing, there is a circulating supply of 18,902,906 BTC. However, the amount of new Bitcoin being released is in a permanent state of decline, which makes BTC a deflationary token. 

Each time a Bitcoin miner completes work adding a new block to the chain, they are rewarded with BTC but the amount they receive halves on a regular basis - roughly every four years. Initially, the block reward equated to 50 BTC. This was then halved to 25 BTC in 2012, then again to 12.50 BTC in 2016. The last halving occurred in May of 2020, with the block reward now standing at 6.25 BTC.

The halving of the block reward means that fewer and fewer Bitcoins are being released as time goes on. Given that many investors choose to hold their BTC over the long term, this means that the scarcity of the token is also increasing - which in turn could have a positive effect on its value. 

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Terra (LUNA)

Background

The Terra project seeks to leverage stablecoins to provide a genuinely viable digital payment solution. By minting new stablecoins pegged to a country’s national fiat currency, Terra provides an environment in which users can make payments for retail transactions - including cross border payments - without having to worry about the substantial volatility usually seen with cryptocurrency. 

The project was set up by Korean firm, Terraform Labs and its mainnet went live in 2019. It has  benefitted from substantial investment, with firms including Galaxy Digital, Arrington XRP Capital, Pantera Capital and BlockTower Capital helping the project raise some $150m as of 2021. 

The Terra platform has its biggest user base in Korea and Asia but is gradually expanding into new territories as uptake continues to rise. The platform also hosts various DeFi applications and can also support NFTs.

Token fundamentals

Terra is a platform that centres around stablecoins, so it will come of little surprise that it actually plays host to several tokens, including TerraKRW (KRT), which is pegged to the South Korean won, TerraUSD, pegged to the US dollar, TerraJPY, TerraCNY, TerraEUR, TerraGBP and TerraSDR.

So where does LUNA come in? Well, LUNA is the token that powers the entire Terra ecosystem. First and foremost, Terra stablecoins are algorithmically pegged to their fiat equivalents - this means that they require a collateral token to balance their value and keep things stable. LUNA acts as that collateral. 

The actual mechanism involved in the Terra Luna protocol is too complex to be broken down here, but it’s enough to know that LUNA can be burned to generate stablecoins and vice-versa. In addition to this, LUNA is also the governance token of the Terra project and is used in the staking protocol. 

Supply and Demand

LUNA’s rate of supply is intrinsically linked to the operation of the entire Terra ecosystem. It has a dynamic supply of 1 billion tokens, which can expand or contract based on demand for the various stablecoins on the network. 

LUNA is burned every time a stable coin is minted. Similarly, stablecoins can be burnt to mint new LUNA - and this is how the Terra system works. Whenever one token deviates from its value, arbitrage ensures that things are quickly brought back into line. For example, if TerraUSD drops in value by five cents to $0.95, holders can still burn it off to create $1 of LUNA, which they can then sell to earn a five-cent profit. This effectively reduces the supply of UST and means that the price variation is quickly evened out. 

This mechanism serves to keep stablecoins stable and means that, in theory, prices of the Terra tokens are less susceptible to wild fluctuations. 

Check Out: Is Terra (LUNA) A Good Investment?

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Terra (LUNA) vs Bitcoin (BTC): Which Is The Better Investment?

On paper, it certainly would appear that Terra Luna has the better long-term prospects - especially given that Bitcoin is becoming an increasingly dated technology. However, technical features do not necessarily equate to price growth in the world of cryptocurrency - and Bitcoin is proof of that. 

To try and ascertain which of these two projects is likely to present the better investment opportunity, we need to consider several information sources. This will help us to manage expectations and hopefully serve to identify the best options for a particular investment portfolio. 

Bitcoin vs Terra: Price History

Before we look ahead and consider price forecasts for Bitcoin and Terra Luna, it’s first worth taking a retrospective and seeing how each token has performed historically. This way we can build an idea of how each project moves in line with the wider market, as well as which market forces they might likely be affected by. 

Bitcoin (BTC)

Bitcoin’s historic price movement is one of the reasons that cryptocurrency investment is as popular today as it is. When BTC first launched, the token was more or less worthless. However, by 2013 it hit a high of $1,242 - which represented some pretty remarkable growth compared to more traditional financial instruments. 

Of course, what goes up must come down and it wasn’t long before Bitcoin - and therefore cryptocurrency in general - earned a reputation for significant volatility. Nonetheless, in the opening days of 2018, the price of BTC peaked at a staggering $19,783. Once again though, this high was short-lived and a market-wide downturn sent Bitcoin plummeting to $3,430 by the end of the year.

By this time, cryptocurrency investment was already hugely popular and, whilst Bitcoin’s remained relatively depressed for a few months, by 2020 it was back on the up. Even the COVID pandemic failed to put the breaks on the market for longer than a few weeks and when 2021 hit, Bitcoin went stratospheric. Its first price run, in January, saw BTC hit $40k. Another price run then came in February/March that sent the token to $64,804.

A short-lived downturn over the summer months saw Bitcoin drop significantly - bottoming out at $29,971 in July. However, things quickly turned around in the last few months of the year, with Bitcoin reaching its all-time high of $68,789 in November.

Terra (LUNA)

Whilst LUNA is the token used for collateral for the Terra stablecoins, it isn’t actually a stablecoin in itself, meaning its value on the open market is subject to often significant price swings. 

This can be seen in LUNA’s first upswing, which occurred just a few days after it launched and saw the token reach $3.31. However, the token soon slumped well below the $1-mark and actually traded below $0.20 for much of the first half of 2020. 

By the time January 2021 arrived, Luna had clawed its way back up to $0.65. However, later that same month it went past the dollar once more, before the first of several bulls saw LUNA surge to $7.33 in February - an increase of over 1100% on its price just over a month prior. 

Naturally, this price surge saw LUNA establish itself as a force to be reckoned with. However, another significant upswing was to come in March, with LUNA reaching an unprecedented $22 per token. A downturn followed and by the time May arrived, Terra Luna was on its way down to $4.18.

The summer of 2021 saw a fairly subdued cryptocurrency market, but LUNA started its recovery in August, hitting $31.11 before the month was out. The soaring price movement continued for several weeks and LUNA achieved $43.82 in September. Hype seemed to surround the token from then on, leading to it reaching its all-time high of $104 on 9th March 2022 - establishing LUNA as one of the hottest cryptocurrencies of the moment. 

At the time of writing, LUNA was holding out at $93 per token. 

Bitcoin vs Terra: Future Predictions

Previous price history is a good starting point for comparing two cryptocurrencies, but ultimately what investors are interested in is what is likely to happen in the future. For this, our best option is to refer to leading market analysts, to see what they are forecasting for Bitcoin and Terra Luna. 

Bitcoin (BTC)

Most analysts appear to believe that Bitcoin still has room to grow and the price predictions we came across were positive overall. However, there could be a few turbulent months on the horizon for the world’s leading cryptocurrency and investors should be aware that they may see significant movement in both directions across 2022. 

DigitalCoinPrice is particularly optimistic about the year ahead for BTC. Its figures suggest that  Bitcoin could reach $65k per token in July and will end  the year at $62,856. BTC is predicted to perform well in 2023, potentially hitting $74,663 by the end of the year. 

Meanwhile, WalletInvestor foresees steadier price increases for Bitcoin across 2022, ending the year at 58,719. For 2023 the site predicts further growth. According to its technical analysis, we could see BTC tentatively climbing to $70k in the first half of the year, before receiving a shot in the arm in the closing months and hitting $82,489 before the end of December.

Then there’s the Bitcoin price prediction from the Economy Forecast Agency. Its analysis echoes that of DigitalCoinPrice in that it has BTC climbing across the first few weeks of 2022, before going into decline across the summer months. The upwards trend is expected to start into 2023, with BTC hitting a potential high of $51,867 by the end of the year. 

These are only predictions, of course, but it would appear that Bitcoin is expected to perform well in the year ahead, save for the occasional downturn. 

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Terra (LUNA)

Terra Luna had a breakout year in 2021 and in the closing days it surged into the top ten cryptocurrencies by market capitalisation. Inevitably, this has stirred up further investor interest and market LUNA out as a token to watch as we head into 2022. However, analysts are still wary of whether LUNA can maintain its current run of good fortune. 

DigitalCoinPrice, for example, has LUNA continuing to rise in 2022, increasing in value by as much as $137.87 in July. However, the altcoin’s trading price will drop slightly to a predicted $124.99 by the end of the year. The platform expects another price surge in 2023, with LUNA reaching a potential high of $160.

Elswhere, WalletInvestor is forecasting a more predictable trajectory for Terra Luna. It’s data suggests that the token could reach $110 in July. LUNA will then continue a steady climb over the year peaking at $164 in December. 

Coinpedia is another platform that expects growth from LUNA in 2022. Its lower estimate has the token at $115.65, whilst its maximum trading price stands at $175.63. The platform’s estimate for LUNA’s average trading price - probably the most reliable forecast for consideration - is $138.7.

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Terra vs Bitcoin: What the Experts Say

It’s always worth hearing from industry insiders on what they think lies ahead for particular projects. Whilst comments should never be taken as an endorsement or financial advice, they can often shed light on current industry sentiment. 

Bitcoin remains one of the most popular investment opportunities - especially for the more traditional investor, branching out into crypto. Elon Musk’s Tesla famously acquired $1bn worth of BTC in 2021 and according to Galaxy Digital’s Mike Novogratz, institutional investment is likely to continue to drive Bitcoin’s price moving forward:

“Every single bank is working on their own crypto project, how they can get bitcoin to their wealthy clients,” Novogratz said. “I think a lot of clients that didn’t buy it the first time will see this as an opportunity to buy it and get involved.”

Terra Luna has attracted plenty of support in recent weeks. Matt Hougan, chief investment officer at Bitwise Asset Management, points out that LUNA has “been largely impervious to the recent market volatility, falling less and recovering faster than its peers.”

“Terra is the hot dot among the cool kids in crypto right now,” Hougan added. “People love the team behind Terra, and they love all the various applications being built on it right now.” He also ventured to suggest that Terra is “gearing up to be a serious Ethereum competitor”  but will need “continued user growth and adoption, even after incentives have dried up, to really compete with Ethereum more broadly,” he says.

Finally, CoinBurau’s Guy the Crypto Guy says that Terra Luna’s recent success is being driven by demand for stablecoins on the platform and a recent protocol upgrade. These, he says, could continue to drive LUNA’s value up. 

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Terra vs Bitcoin: Conclusion

Bitcoin and Terra Luna are two very different cryptocurrency projects but, at the time of writing, they are both included in the list of the top ten tokens by market capitalisation. However, whereas Terra Luna forced its way in the final days of 2021, Bitcoin has always held the number one spot.

Of course, this may lead many potential investors to speculate that Bitcoin has little room left to grow. But then, the same was said at the start of 2021 before the original cryptocurrency went on several record-breaking price runs. With this in mind, it seems that it’s definitely too early to count Bitcoin out.

And Terra Luna? Well, the project has a rock-solid real-world use case and if uptake continues, it could well become one of the leading platform’s for cryptocurrency’s original purpose - to offer an alternative to fiat currency.  

The price predictions for both LUNA and BTC are almost universally positive, though both projects are expected to go through their downturns over the coming year. However, for those investors willing to take on a little risk, either project could prove profitable over the next 12 - 18 months.

Of course, you don’t actually have to decide between Bitcoin and Terra Luna. Both of these projects would be a worthy addition to any investment portfolio and given that their price directions have diverged in the recent past, the two of them together make a good opportunity to diversify. 

How To Invest In BTC & LUNA Coins In 2022

Cryptocurrency investment is more popular than ever before and this looks set to continue in 2022. If you’re yet to step into the market but are looking to get involved, then your first course of action should be to set yourself up with an account on an exchange or brokerage platform. 

We recommend eToro as a good place to start. It benefits from an excellent reputation in the industry, thanks to its approachable trading platform. eToro also offers plenty of information resources and market reports, to help you build your investment strategy.

Opening an account requires some details and a quick verification check, but once this is complete you’ll have access to many of the leading cryptocurrencies on the market as well as numerous other financial instruments. 

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FAQs

Is Terra Luna better than Bitcoin?

Putting one cryptocurrency against another is always tricky as they often have different objectives. That being said, it appears that Terra Luna may certainly prove a more viable alternative to fiat currency, assuming it is able to keep its stablecoins pegged to their respective currencies. However, make no mistake, Bitcoin is still the most valuable cryptocurrency by some margin. 

Can Terra Luna double my money in 2022?

Terra Luna experienced a major price surge in the last few days of 2021, establishing itself amongst the top ten cryptocurrencies by market cap. Naturally, this has stirred investor interest and could have a knock on effect in 2022. That being said, analysts are still cagey about LUNA’s potential and 100% growth may be a little too ambitious for 2022. However, by 2023/2024 there’s every possibility LUNA could double your money.

Where can I buy cryptocurrency?

If you want to start investing in cryptocurrency then the first step is to find a reliable broker or exchange that can give you access to the market. We recommend eToro, as it is a trusted brand that has an excellent trading platform, suitable for both novice and more advanced users. 

Which crypto should I buy in 2022?

Cryptocurrency investment is likely to be more popular than ever before in 2022, with investors trying to figure out the most worthwhile additions to their portfolio. Choosing which tokens to invest requires careful research and it’s important to have some sort of strategy in place. As a starting point, feel free to check out our guide to the 10 cryptocurrencies that could explode in 2022. 

Does Bitcoin still have room to grow?

After Bitcoin’s record-breaking year in 2021, some investors have suggested that the original cryptocurrency might just have peaked. However, this appears to be a minority opinion - most analysts believe that BTC will continue to climb, albeit with a few downswings along the way. 

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