Native token project Cosmos is breaking records for growth ahead of an upcoming system update. In the long term, the coin remains bullish, but a correction is possible in the short term.
Atomic growth
While everyone is watching Bitcoin closely, something interesting is happening in the altcoin world. Cryptocurrency ATOM yesterday renewed its all-time high against the dollar at $ 26.33. In two weeks in February, the coin has risen in price by 220%.
This phenomenal growth pushed ATOM to 16th place in the Coinmarketcap ranking. At the time of writing, ATOM / USD is trading at $ 23.9. The market cap of the coin is $ 5.68 billion.
ATOM is growing not only against the dollar. The token is also actively being paired with Bitcoin. ATOM / BTC formed a bottom on January 9, 2021 at the 0.00014 area. Now one ATOM costs 0.0005. The token is still far from its all-time high, paired with bitcoin at 0.00076. However, the current growth is notable for what is happening amid the explosive growth of the main cryptocurrency.
What is ATOM
ATOM is the native token of the Cosmos blockchain project, which promises to solve all the most difficult problems of the blockchain industry.
More specifically, developers try to optimize the weaknesses of the proof-of-work protocols. This applies to aspects such as transaction processing speed, scalability, carbon footprint and development complexity. The project creates a modular structure that helps to quickly build decentralized applications.
Who sent ATOM into space
The project is gearing up for an important network update called “Stargate” on February 18th.
After the upgrade, Cosmos-based blockchains will be able to communicate via a standardized protocol, exchanging data and tokens. In addition, transactions in Cosmos blocks will be processed faster, fees will decrease, and developers will have access to different programming languages.
“We expect the Cosmos Hub’s throughput to increase 100 to 100 times. This improvement is extremely important for the project, because the volume of transactions between blockchains is growing, ”the project’s website says.
In addition, the developers promise that nodes will sync 96 times faster, and updates 20.
How token holders make money
Deploying new features will make it more convenient and attract new followers. In turn, the growing popularity of the ecosystem will contribute to the growth of the value of the ATOM token, which is closely woven into the infrastructure and is actively used in the network. In particular, token holders receive a portion of the commissions generated by the network and also have the right to vote on improvements. In addition, ATOM can be used for staking in Cosmos liquidity pools.
In July 2020, the project became one of the developers of the new Anchor DeFi protocol, together with Polkadot and Terra. The project offers users deposits in stablecoins with interest. It’s hard to tell what state Anchor is in right now. It is only known that his social networks have been inactive for a long time.
What’s next
The excitement around the upcoming update attracts speculators and pushes the ATOM rate to new highs. Given the favorable fundamentals and stable development of the project, in the long term, the token is likely to continue to grow, fueled by the general bullish trend in the cryptocurrency market.
In the short term, traders should prepare for a correction. The coin is overbought from a technical point of view. In addition, after the update, the market may play out the “buy on rumors, sell on facts” scenario.
This is a frequent occurrence in financial markets. Traders and investors buy an asset in anticipation of a positive event or news, and take profits when it happens or is confirmed. This triggers a retracement cycle that returns the overbought market to balance.
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