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Investors are Gravitating Towards Algorand, and Here is Why

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Opinion pieces are based on the author's personal opinion, and they do not constitute investment advice, financial advice, or trading advice. Securities.io does not recommend that any cryptocurrency should be bought, sold, or held by you. Conduct your own due diligence and consult a financial advisor before making any investment decisions.

Algorand (ALGO) is an interesting crypto project which saw excellent performance this year. Despite it being only 2 years old, give or take a few months, the project has attracted a lot of attention in 2021.

One reason for this is its good price-performance, as, throughout 2019 and 2020, the project’s price mostly sat near the bottom, around $0.22. This changed drastically in 2021, as it started growing as soon as the year kicked off, reaching the price of $1.70 by mid-February.

The project saw a correction after that, but only to $1, after which it once again surged, this time to $1.80 in mid-April. After another, milder correction, it surged once more in early May, this time only to $1.62. Some believe that its price would have continued to go up if not for the market-wide price crash that took Bitcoin from its ATH at $64.8k to $32k.

Algorand, on the other hand, went from $1.60 to around $0.65, which is the lowest it has been since early February. But, it is also worth noting that, before 2021 — this would have been considered an excellent price.

The real twist for ALGO started coming around two weeks ago, on August 28th, when the price started shooting up — and it never stopped. Algorand kept going further and further up until it hit $2.54. While it is still below its all-time high, which sits at $3.28, and was reached on June 21st, 2019, it is the closest the project has approached it in over two years.

What is Algorand about?

In order to understand why is Algorand an attractive and worthwhile project, we must first talk about what it is about. Essentially, the project operates as a self-sustaining, decentralized network based on blockchain technology, that supports a wide range of applications.

It offers a secure, scalable, and efficient system that is quite effective for supporting all kinds of applications, and allowing them to function in the real world. In addition to that, the project is also attracting attention due to great transaction speed and efficiency, which its developers particularly focused on after seeing how blockchains like Bitcoin and Ethereum struggle to scale and meet the community’s demand.

Algorand wanted to have a shorter transaction time and to handle a greater amount of transactions at one time. However, it also insisted on having low fees, which is a particularly great issue with Ethereum. While Bitcoin fees have been known to be extremely high, Ethereum’s need to be paid more often, as every move in its ecosystem requires some kind of small transaction to be made.

Finally, Algorand did not want to rely on energy-intensive mining, and so it launched on a pure PoS protocol.

Why is Algorand growing?

Algorand’s make-up, as well as price performance, have been attracting investors from all around the world over the last few weeks. More than that, the project started attracting rather big money.

Only days ago, it was uncovered that Algorand got a new DeFi fund, known as Viridis DeFi Fund, which offered to provide 150 million ALGO coins to fuel the development of the project’s DeFi sector. The fund, which was around $300 million large at the time, offered to provide grants for different subsectors of DeFi. These SupaGrants, as they are known, will each bring $5 million to specific categories, with the first two focusing on oracle network-related projects and bridge-type projects.

In other words, the fund is primarily aiming to support projects that revolve around bringing off-chain data to the blockchain, as well as those that will push the growth of interoperability between Algorand and other networks.

With that in mind, Algorand is growing because it is rapidly attracting DeFi investors, as well as users of DeFi applications and protocols. And, of course, it is expected to quickly grow and become one of the most developed and best-connected projects around, thanks to this incentive.

The presence of the fund will arguably speed things up a lot for Algorand, and the project — even though it would have grown on its own, eventually — will now see a rapid rise as a result. The events have already been set in motion, and ALGO is now traveling down the path of blockchain giants, which is why we believe that it is an excellent time to buy now, before it skyrockets to its ATH, and then to completely uncharted territories.

To learn more about this project visit our Investing in Algorand guide.

Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN, Capital.com, Bitcoinist, and NewsBTC.

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