Algorand Has Rallied 600% This Year—What Has Fueled These Gains?

Forbes

Algorand’s algo token has rallied over 600% this year, as its network continues to benefit from … [+] rising adoption. Will this digital currency continue to push higher? (Photo Illustration by Chesnot/Getty Images)

Getty Images

The price of algo, the native token of the Algorand platform, has risen sharply this year, climbing higher as its network benefits from rising adoption and widespread visibility.

How To Get Free Crypto  

Algo reached $2.49 on September 9, at which point it was up more than 630% year-to-date (YTD), CoinDesk data shows.

Further, it was trading at its highest point since late January, when the digital asset’s price surpassed $3, additional CoinDesk figures reveal.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

This digital currency has gained value at a time when the Algorand network, which leverages pure proof-of-stake for its consensus algorithm, seems to be benefiting from widespread utilization.

Coinbase Banner  

Since its launch in 2019, the blockchain platform, which is designed to finalize transactions almost instantly and provide high throughput, has caught the attention of governments, industry participants, investors, and the key stakeholders behind stablecoins USDC and tether.

Late last month, financial infrastructure provider Koibanx announced that it had made an agreement with El Salvador, which would involve the company building blockchain infrastructure on top of the Algorand blockchain.

Under this agreement, Algorand helped enable the creation of Chivo, the Central American nation’s bitcoin wallet, by serving as the official blockchain provider.

MORE FOR YOU

Today, Algorand announced that the Colombian government had chosen Vitalpass, a covid-19 vaccination passport, as its official method for documenting who has received the vaccine.

FreeBitcoin Banner  

Algo’s Performance ‘No Surprise’

Kay Khemani, managing director at Spectre.ai, weighed in on developments like these, emphasizing the numerous headwinds that have been driving algo prices higher.

“Algorand’s outperformance this year, relative to not only the underlying digital asset space but more pertinently, other chain protocols and plays, comes as no surprise,” he stated.

“Whether it is Società Italiana degli Autori ed Editori’s (SIAE) decision to launch millions of NFTs on the Algorand blockchain, the Marshall Islands electing to power the first [national] digital currency on Algorand rails, El Salvador accepting to work with Koibanx to develop some of the country’s digital infrastructure on Algorand technology, or stablecoin majors like Circle developing solutions on the chain; all of these act as catalysts for further adoption and upward price action.”

A Highly Professional Project

Loan Venkatapen, who serves as both cofounder and managing partner of Blocklabs Capital Management, also commented on the Algorand platform, emphasizing that the people behind it have been devoted themselves to building.

“Algorand is one of the most professional projects in the crypto ecosystem,” he stated.

“They always prioritize development over communication/PR (rare in our ecosystem) which explains their relative lack of exposure compared to the stellar achievements you mentioned as applications of their technology in the mainstream world.”

Shift Toward Decentralization

Venkatapen also mentioned the platform’s planned shift to a decentralized model, which is scheduled to happen October 1, after members of the Algorand network approved a community governance referendum.

Under this new system, community governors, token holders who commit to staking their algo for a period of three months, will have the ability to use the Algorand Ecosystem Resource Pool, which has 3.2 billion algo, as they see fit.

He cited this development in playing a crucial role in the token’s recent gains, stating that:

“We believe the recent token rally is mainly the result of their shift from a centralized governance model via the Algorand Foundation towards a decentralized token-centered and community-based governance model to be launched early October.”

“The launch will also be accompanied by a full Defi ecosystem comparable to other blockchains but with the advantage of being a non-forkable, low-fee and native layer 1 environment,” Venkatapen added.

“Historically, adding governance rights to a token while launching a full suite of decentralized apps has always proved to impact positively a token price,” he stated.

Crypto Industry Maturation

Amber Ghaddar, cofounder of decentralized capital marketplace AllianceBlock, also commented on algo’s recent gains, linking it to the ongoing evolution of the digital currency markets.

“The Rally in Layer 1 blockchains – Solana, Cosmos, Algorand etc., follows our thesis of expected increased decorrelation between bitcoin and other cryptocurrencies: As layer 1 blockchains mature and start creating real life use cases, their prices will be driven more and more by their own underlying factors,” she stated.

“We have previously stated that price in crypto is made of a speculative component based on, amongst other things, expected future use and a fundamental component based on network activity,” Ghaddar noted.

“Many traditional players may look at the inflated valuation of layer 1 blockchains like ALGO and dismiss it as a hype,” she stated.

“It is however worthy to remember that TESLA was trading at 1000 P/E at a certain point based mainly on forward expectations and it took them years to become profitable. We can see similarities in terms of inflated valuation with some of the more mature crypto assets out there which hold great promise.”

Investors Flock To Altcoins

Recently, certain altcoins (digital currencies other than bitcoin) have experienced compelling returns, while bitcoin itself, the first digital currency to scale, has continued to trade south of its all-time high.

Cardano’s ada, for example, recently reached an all-time high, while the price of ether doubled over a short time frame, CoinDesk data shows.

Nick Spanos, cofounder of Zap Protocol, weighed in on this situation.

“There’s no denying it’s altseason, but as with blockchain in general, Algorand was prepared for the opportunity. That’s the definition of luck: They’re in the right region, with the right solutions, at the right time.”

Khemani also offered some perspective on the mindset of market participants.

“While Ethereum still remains the most battle-tested network with the largest number of decentralized apps in play, investors continue to look for the next big ‘Ethereum Killer’ to rotate into,” he stated.

“However, they want in on the action at a sizable discount. Algorand arguably plays well into this as it does trade at a hefty discount to Ethereum’s market cap, perhaps signalling ‘deep value’ for some.”

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.

Go to Source
Author: Charles Bovaird, Senior Contributor


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.