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Bitcoin and altcoins moved higher on Tuesday amidst the macroeconomic uncertainties driving the sentiments in the near term.
The leading cryptocurrency went above $27,300, still keeping it in the tight range but below the 20-day simple moving average at $27,500. Meanwhile, Ether rose past the $1,850 level. This has the total crypto market cap up by 1.1% at $1.187 trillion ahead of US President Joe Biden discussing the debt ceiling later in the day.
In the crypto market, meanwhile, Hong Kong has announced that retail investors could trade digital assets from June 1. Hong Kong's Securities and Futures Commission (SFC) said it would accept applications from crypto exchanges in the coming days, adding that approved tokens need a substantial market cap and a 12-month track record but would be barred from offering stablecoin and interest-bearing instruments.
Elsewhere, there has been a decrease in crypto hacks, as per a new report by TRM Labs. The report stated that there had been a 70% decline in hacks from Q1 2022.
Over the past month, Bitcoin has been in a consolidation phase, with the crypto fear and greed index remaining in the neutral zone with 50 points. Overall, investor sentiment continues to be cautious in the backdrop of the rising dollar index and US debt ceiling discussions. However, some analysts expect a successful resolution of the debt ceiling drama to put downward pressure on Bitcoin.
The US 10-year yield jumped to over a two-month high of 3.75% while the two-year spike to 4.4%, suggesting the possibility that the Federal Reserve will continue its rate hike campaign, which will negatively impact the appeal of risk assets like tech stocks and cryptocurrencies.
Amidst all this, with 8.3% gains, NEO emerged as the largest gainer among the top 100 cryptocurrencies by market cap in the past 24 hours. At the time of writing, NEO has been trading at $10.45 while managing $87.2 million in volume, according to CoinGecko.
The 65th largest crypto, with a market cap of $734.2 million, is also one of the top-performing coins in the past week, with more than 12% gains.
Much like the rest of the crypto market, after the brutal 2022, NEO price surged in value in 2023 to nearly $15 towards the end of Feb., only to drop under $10 in the second week of March. Over the next month, the price of NEO went upwards before topping at just above $13.50. And last week, NEO went back to around $9 before it started gaining traction this week.
While up 61% in 2023 so far, NEO is still down a whopping 95% from its all-time high (ATH) of almost $200 that was hit in Jan. 2018.
Just after the launch of its mainnet, the token dipped to an all-time low of $0.07229 in October 2016. Much like the price of other cryptos, NEO's price stagnated in 2018 but then failed to rise above $25 in the next two years. During the 2021 crypto bull run, NEO's price only managed to climb to $140, which was the highest in over three years.
As for why NEO is trending right now, there is no clear reason. Currently, NEO is the 5th most traded crypto asset on the Korean crypto exchange Upbit after Bitcoin, STEPN, XRP, and Sui.
The broader crypto market is currently lacking any trend. Notably, it is much easier to move the price of crypto assets in the currently low-volume environment.
Riding the AI Wave
Much like the price, the total value locked (TVL) of Neo has risen to $42 million, up from $30 million at the beginning of the year but significantly down from the $346 million peak in May 2021, as per DeFi Llama. However, decentralized exchange (DEX) Flamingo Finance accounts for 98.58% of this TVL. The other two prominent protocols on Neo are DEX Forthewin Network and liquid staking protocol NeoBurger.
So, one likely reason for the rise in its price could be NEO jumping on the Artificial Intelligence (AI) bandwagon. Currently, one of the fastest-growing industries in the world, everyone is trying to embrace AI in some capacity.
Over the past few months, AI fever has gone mainstream and taken over crypto as well. The convergence of these two rapidly evolving fields has sparked a new wave of excitement and possibilities.
This makes sense, given that the integration of AI into the crypto space has the potential to introduce various advancements in many fields, such as algorithmic trading, developing predictive models and forecasting tools, and enhancing security and fraud detection.
However, most crypto projects are currently jumping on the AI trend merely in name, without substantial implementation or genuine value. This trend of leveraging the buzz around AI without proper substance is not unique to the crypto industry but is prevalent across various sectors due to the current hype surrounding AI technologies.
When it comes to NEO, the project announced the winners of its NeoChat ChatGPT launch competition on Monday. The latest spike in NEO's price is likely because of this investment in AI.
Besides AI fever, recently, Neo partnered with Alchemy Pay for easy on-and off-ramping to the Neo Ecosystem. Developers building on the Neo blockchain will also benefit from the direct-to-customer plugin of Alchemy Pay, as it can be easily integrated and deployed on dApps with minimal cost and fuss.
The Alchemy Pay payment gateway allows users to make payments using Mastercard, Visa, Diners Club, and Discover. The platform's KYC process, low fees, and attractive conversion rates make buying and selling crypto with local currencies fast.
Moreover, Alchemy Pay's extensive network of fiat payment channels and ability to permit checkouts beyond card payments into local mobile wallet options will allow Neo users to purchase crypto using their preferred local fiat currencies across the globe.
What's Going on With NEO?
NEO is the native cryptocurrency of the open-source, community-driven Neo blockchain platform. The platform aims to build a comprehensive “smart economy” by incorporating smart contracts, digital assets, and digital identities.
It was founded by Da Hongfei and Erik Zhang in 2014 as Antshares (ANS), only to be rebranded as Neo in 2017. Touted as the “Chinese Ethereum killer,” the project has failed to surpass Ethereum, the second-largest cryptocurrency by market value after Bitcoin.
The blockchain uses a “Delegated Byzantine Fault Tolerant” (dBFT) consensus algorithm with a capacity of around 1,000 transactions per second (TPS). Meanwhile, its NeoContract smart contract system consists of three parts: a virtual machine NeoVM, interoperable service provider InteropService, and a compiler with an IDE plugin called DevPack.
One of the key features of the Neo blockchain is its decentralized identity tool called NeoID which lets users verify credentials without the need to share private data. This identity framework can be integrated into identity services such as data verification and attribute verification.
The Neo blockchain has two native tokens for its ecosystem: NEO and GAS. The NEO token represents the right to manage the blockchain, and the GAS token is used to represent the right to use the Neo blockchain.
NEO token holders get to participate in both on-chain and off-chain governance. Off-chain governance decisions can be voiced to the Neo Council, which is responsible for making strategic and technical decisions and for implementing changes. For on-chain governance, holders can use their NEO tokens to vote on protocol upgrades and receive GAS tokens as an incentive for participating.
Out of the total supply of 100 million NEO tokens, 70.530 million coins are currently circulating in the market. During the ICO held in August 2017, the project raised over $28 million by distributing 50 million tokens to ICO participants and allocating the remaining 50 million tokens to the Neo Council to support the ecosystem projects.
In 2021, the Neo blockchain released N3, its latest smart contract platform upgrade, adding features such as native distributed storage and oracles.
Earlier this month, the project released Consensus 2023 Recap, in which it noted that Neo N3 has unlocked unprecedented functionality, enhanced the economic model, and made possible a highly modular, developer-friendly architecture for crafting dynamic dApp applications.
It further noted that Neo is a proven and robust blockchain project that has withstood the test of time and is purpose-built to make it easy for developers and businesses to realize their visions.
At the Consensus 2023 event, the Neo team created a “phygital” experience that bridged the digital and physical worlds.
In collaboration with Neo developer communities COZ and AxLabs, the project gave visitors their own physical OneBand rings. OneBand recipients could activate their rings and claim a custom-designed dynamic Texas horned lizard NFT.
Despite all this, NEO's journey has been a turbulent one ever since its launch, and its fate is yet to be determined. For now, with NEO volume retreating, it is possible these gains might not last long either.
Gaurav started trading cryptocurrencies in 2017 and has fallen in love with the crypto space ever since. His interest in everything crypto turned him into a writer specializing in cryptocurrencies and blockchain. Soon he found himself working with crypto companies and media outlets. He is also a big-time Batman fan.