The rapid rise and fall of meme tokens have become quite the head-scratcher to those closely following the ever-changing cryptocurrency market.
Since the beginning of the pandemic, the market has dealt with its share of extreme changes, rising through multiple crashes and losses.
From its lowest point in March 2020 to early December 2021, the value of cryptocurrencies skyrocketed to $2.3 trillion. In part, this is due to the trends set by meme tokens such as Dogecoin and Shiba Inu, but the unreliability of these coins has led them to be included in the top 10 based on market cap.
However, investors are hoping to filter out meme tokens to re-stabilize the market in the coming financial quarter. This is where coins like Algorand are labeled as a proverbial glimmer of hope.
What Is Algorand?
Among the 15,000 or more tokens listed on the crypto market, Algorand has been singled out as the next coin to out-rank the memes.
Currently, Algorand (ALGO -3.35%) stands at a market value of around $10.2 billion. In comparison, Dogecoin and Shiba Inu stand at $23.2 billion and $19.9 billion, respectively.
As of December 6, the ALGO coin is crawling back after the sharp drop in price over the weekend, trading around 45% above the lowest level over the three days. The price, at $1.18145, is significantly lower than the $3 peak.
What Makes Algorand Unique?
Simply put, Algorand is heading towards being the most efficient cryptocurrency, and its blockchain mechanism is a much-needed improvement over the traditional proof-of-stake model.
Dubbed “pure proof of stake”, ALGO’s model randomly selects groups of users to vote on proposals and decide on new blocks. By doing so, developers have eliminated any possibility of specific groups of holders monopolizing the network.
Another reason Algorand is attractive to users? It’s speed. Boasting a transactional finality of 4.39 seconds and the ability to process 1,152 transactions per second (TPS), ALGO runs much faster than ERC-20 tokens (those built on the Ethereum blockchain), which are limited to 13 TPS and can take up to six minutes to be processed.
Perhaps the most definitive explanation for the rise of Algorand lies in its developers recognizing the importance of updated blockchain operability.
As more and more businesses develop their own unique blockchain, there are strong chances different blockchains will not be able to mesh with one another. Algorand is currently focused on coming up with solutions that can bridge the gaps between these, ensuring that the digital business world continues to run smoothly and transactions are completed as quickly as expected.
Did Bitcoin’s Flash-Crash Have Much Of An Effect?
Algorand certainly took a hit after the crypto giant’s crash over the weekend, but being an altcoin, it managed to survive.
After the crash, the market was shaken by $2.5 billion market liquidations, which brought the cumulative crypto market cap down to $2.2 trillion.
Despite its relative survival, Algorand wasn’t entirely in the clear. It may have lost nearly 25% of its value over a 24-hour period, but analysts agree that the rebound was impressive.
Predicted To Surge?
Some analysts seem to think so. There appears to be a pattern forming that will aid ALGO in squandering its meme-based competitors over the next six months.
Thus far, its price has followed the textbook example of a bull flag, this being a consolidation channel that appears after an uptrend. According to analysts, consolidation after a strong uptrend is seen as a sign of continuous growth.
In order to surge, the price of Algorand needs to be at or just above $2.30 to confirm a positive breakout.
On the other hand, this is also true for the downside. It is difficult for ALGO to depreciate than appreciate in the current market, and sellers will have to make peace with the daily close being below 50%. When compared to the significantly more erratic trends displayed by meme tokens, Algorand is undoubtedly lagging behind.
What About Its Status As ‘The Ethereum Killer’?
As mentioned previously, a large part of Algorand’s appeal is its unique blockchain. It has quickly emerged as a leading player in the innovative contract platform as the market’s focus has begun to shift towards a more multi-chain approach. ALGO’s extensive network of business partners has most certainly strengthened its status as the Ethereum killer.
As per AMBCrypto.com, Algorand’s recent contracts have garnered the attention of multiple future business investors.
Borderless Capital announced it was launching a $500 million ALGO fund to develop new projects on the blockchain, including one that alleges to“to disrupt the creators’ economy with NFTs and initiatives. Well, something that can increase capital in the ALGO’s DeFi ecosystem through liquidity mining, lending, borrowing, and yield farming.”
This year has brought Algorand more lucrative network contracts. Earlier in April, Algorand announced it would invest 250 million ALGO tokens to encourage the creation of Daps, and in September, the platform launched a $300 million DeFi fund. Both of these accelerated the network’s image in the DeFi space, proving to be an intelligent visibility gimmick.
Gaining even more momentum from the press, the first week of December – while dealing with the Bitcoin crash – Algorand’s TVL hit the $100 million mark, pushing it to 6.19%.
Even though its price has plateaued, there is no denying that the token has high interest. Due to the fact that ALGO’s ROI v. USD was an impressive 472.75% last year, it is no surprise that Paypal has announced that Algorand is undoubtedly on its radar.
All that remains to be seen is whether or not interest in ALGO will triumph over the fluctuating market caps of its joke-coin competitors. With Dogecoin not looking like it is going to disappear anytime soon, and newer coins like Kitty Inu being labeled as potential spam tokens that have outraged buyers, the crypto world will have to wait and see whether technological advancements continue to have the upper hand.
