Terra isn’t dead: the network is back up and running on a new blockchain, focusing on a more decentralized governance model. The community is making no attempts to revive its recently failed TerraUSD (UST) stablecoin. It has, however, re-launched a new version of the LUNA governance token, restarting its supply at 1,000,000,000 tokens. Here are the facts on the new blockchain, why it was launched, and the new token’s airdrop/ distribution. Background on Terra 2.0 Terra 2.0 (now known formally…
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Factors Driving the Price of a Crypto Project to Skyrocket
Cryptocurrencies continue to showcase outstanding crypto performance since the launch of Bitcoin in 2009. Global investors are looking forward to establishing financial stability with digital assets. Due to the growing interest, crypto prices are making a drastic shift to the top.
Still, in some scenarios, the market trend keeps decreasing for specific periods. A coin’s bearish momentum creates fear and panic for users who believe in the future of the asset.
The opposite is a bullish market that records skyrocketing prices of cryptocurrencies. This article plans on exposing some of the factors that lead to a surge in digital currencies.
What Leads to a Crypto Price Increase?
Market activities account for the volatility patterns of digital assets. Thus, cryptocurrency values are sensitive to several factors which trigger a price action. Such aspects include:
Crypto Project Upgrade on crypto performance
A network overload is a common issue targeting the functionalities of crypto assets. At that time, users encounter a slower system that fails to complete the intended goal. Modifying the asset’s architecture improves efficiency and later increases its value.
The London Hard Fork proposal is an excellent example of an upgrade that boosts the network. Among the five proposals, the EIP-1559 stands out as ETH’s significant gamechanger.
In the EIP-1559 plan, Ethereum is going to burn the network’s transaction fees. While it may be a disadvantage to miners, decreasing the supply of ETH could boost its prices.
Like Bitcoin, Ethereum can now operate as a store of value if the burning action continues. Such upgrades, like burning, increase the coin’s value using deflationary mechanisms.
Use Cases
Digital currencies with several use cases can also lead to their price increase. The market today hosts thousands of digital assets with a cumulative market cap of $2.16 trillion. So, the future is going to determine which of these coins carries the most compelling use cases.
Bitcoin, being the dominant cryptocurrency with amazing crypto performance, has limited use cases to offer. The number one crypto asset usually operates as a payment medium and a store of value. Coins such as Cardano’s ADA expand their use cases to present users with a multipurpose asset.
Aside from being a payment medium, ADA also allows holders to take part in voting activities. As a governance asset, holders can decide on the platform’s future developments.
Staking is also available for ADA holders who receive rewards for validating transactions. Widening a coin’s use cases uplifts its prices as users can perform various tasks with one asset.
Technological Implementations
The world is currently running on a digitized economy with cutting-edge technological advancements. Cryptocurrencies take the digital representation of money using specific modern mechanisms. The more advanced a crypto project is, the more it experiences an increase in value.
Automation gives investors confidence that the system is going to manage complex tasks. A smart contract is a technological feature that fulfills agreements set by parties. These contracts simplify processes since they only execute once parties do their part.
Cross-chain technology is another advancement that facilitates the communication of different blockchains. Blockchains can come together and seamlessly exchange data.
Cosmos is the leading cryptocurrency using cross-chains through its Inter Blockchain Communication protocol. The network can work with various platforms ranging from NFTs to DEX protocols. Implementing these innovations increases the coin’s value as every action is straightforward.
Adoption Levels
Countries hold different opinions when it comes to digital currencies. Some regions may view digital assets as a risky investment that can only lead to losses. Others find cryptocurrencies as a significant breakthrough in the traditional financial system.
As such, a higher adoption level stimulates the values of digital coins to increase. According to a report by Chainalysis, the global adoption level is up by 880% since 2020. The countries leading with a higher adoption index include Vietnam, Ukraine, and India.
Investors are eager to use digital coins and leverage an ecosystem run by the community. Crypto grants security and anonymity to users embracing the digital asset era. As the user base expands, the prices of digital assets also register an upward trend.
Prominent Moguls
Positive remarks from influential figures cause an increase in cryptocurrency prices. Some wealthy icons believe that the digital currency space is the next big thing. These sentiments alone give the crypto performance the boost they need to record a growing value.
In other cases, specific icons even add virtual currencies to their investment portfolio. Twitter CEO, Jack Dorsey, is an outspoken figure with immense confidence in Bitcoin.
His payment company, Square, acquired 4709 bitcoins as part of its investment plan. At press time, this figure is equal to Bitcoin investments worth more than $228 million.
Another influential figure is Elon Musk, who made a Bitcoin investment worth $1.5 billion. After the investment news, the dominant crypto saw a 17% increase in its value. These actions by famous individuals promote an increasing price momentum for virtual currencies.
Final Word
Cryptocurrencies rely on various elements to record increasing values. Through these factors, the community can remain hopeful of the emerging crypto industry.
The global economy today is at stake, particularly with the ongoing pandemic. Users require better financial tools that don’t cater to a specific group only. Hence, most individuals are moving from the traditional system to invest in cryptocurrencies.
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Even with the ongoing regulatory pressure, virtual currencies continue to thrive more in the financial industry. In the end, the surge in prices means more profits for investors.
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