2 Reasons Cosmos’ ATOM Token is Soaring Today

0

What happened

One of the top 20 most intriguing cryptocurrencies by market capitalization that few investors may have heard of is Cosmos ( ATOM -3.22% ). This token has experienced a tear over the past week, appreciating by almost 30%. Today it is up 5.8% over the past 24 hours, as of 1:15 p.m. ET.

This impressive performance is due to two key factors that investors have their eye on.

First, cryptocurrency exchange FTX announced that it would list Cosmos’ ATOM token on a spot market basis. ATOM-USD and ATOM-USDT trading pairs will be available from 14:00 UTC today.

Image source: Getty Images.

Second, investors seem to appreciate the array of Cosmos partnerships that have sprung up lately. In particular, a previously announced bridge between the Cosmos blockchains and Peas, the Astar/Shiden network, recently reached a key milestone. Investors seem to be bullish on this catalyst, as it represents another catalyst for the growth of the Cosmos ecosystem.

So what

Each time a given token is listed on a leading exchange, the increase in liquidity resulting from this movement tends to drive said token up in the short term. Traders looking to get ahead of this move tend to take a bullish stance on these tokens, which has been one of the drivers behind Cosmos’ impressive move over the past few days.

In addition to this near-term catalyst, the longer-term interoperability work undertaken by Cosmos is perhaps more important to investors. Those who see longer-term where the crypto-focused future lies may like how Cosmos provides scalability and interoperability – two key areas that many blockchains lack. The larger the Cosmos ecosystem, the greater the potential for token price performance as investors flock to projects capable of expanding without limitation.

Now what

Cosmos’ interconnected blockchain network could very well be the future we’ve all been waiting for. However, until this key infrastructure is built and we have a clearer picture of how these bridges will work, investors are at increased risk. That said, given how quickly Cosmos has appreciated in the market cap rankings, it’s clear that many investors believe strongly in this network’s ability to meet its interoperability and scalability goals.

At present, Cosmos is a network with short and long term catalysts, against the backdrop of very positive momentum in the crypto world. As a result, I think this token is one that could take investors with stomachs for volatility on a very fun ride from here.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

Share.

About Author

Comments are closed.