Algorand Crypto: Smart Investment Or Risky Gamble?

Algorand (ALGO) is a decentralised, open-source blockchain network that uses a two-tiered structure. Launched in 2019, it quickly rose to become one of the top 30 cryptos based on market cap. Algorand's blockchain is forkless and uses a permissionless, Pure Proof-of-Stake (PPoS) consensus mechanism that finalises blocks in seconds. The network can handle 1,000 to 1,200 transactions per second, with fast transaction speeds and low fees, making it a potential competitor to Visa and MasterCard. Algorand also has a rapidly growing NFT market. All these factors make it a promising investment opportunity. However, it is important to note that the crypto market is highly volatile, and it is difficult to predict the future performance of any coin or token. As such, investors should always conduct their own research and carefully consider their risk tolerance before investing in cryptocurrencies like Algorand.

Algorand's price history and future predictions

Price History

The Algorand blockchain was launched in 2019 by Silvio Micali, a computer-science professor at the Massachusetts Institute of Technology. The ALGO token price launched at $2.16 in late June 2019 and quickly dropped to $0.64 within weeks. The price continued to fall, reaching a low of $0.13 in March 2020 when cryptocurrency prices bottomed out.

The ALGO price moved up to $0.33 at the end of 2020 and followed the broader market trend higher to $1.71 in February 2021. However, unlike other cryptocurrencies that reached new highs in April and May 2021, the Algorand price failed to surpass the $1.70 level and slid to $0.70 in July 2021.

Algorand did participate in the 2021 summer rally and set a new high above $2.38 on 12 September. But it was unable to hold on to the gains, dropping to $1.57 on 21 September. The coin traded back up to $1.83 in November but ended the year at $1.66.

The decline accelerated into 2022, with ALGO trading at a low of $0.68 on 14 March. The market turned higher in late March, with the broader crypto rally, but Algorand failed to sustain the upward momentum. Following a series of market crashes, the crypto reached a low of $0.2765 on 18 June 2022.

Future Predictions

It is worth noting that price predictions for cryptocurrencies are often wrong and that the market is extremely volatile. As of 22 September 2022, some sources provided the following predictions:

• Cryptopredictions.com predicted that the coin would close 2022 at a little over $0.46, dropping to around $0.39 in September 2023, and reaching $0.69 in September 2026.
• DigitalCoinPrice predicted that the coin would hit $0.40 in 2022, $0.82 in 2023, $1.14 in 2024, $1.52 in 2025, and $1.28 in 2026.
• Gov Capital predicted that Algorand would trade up to $0.40 by the end of 2022 and climb to a little under $1.56 by the end of 2023, reaching $4.40 on 22 September 2025.
• WalletInvestor took a bearish view, predicting that the coin could drop to $0.01036 by September 2023.

More recent sources, as of September 2024, suggest the following:

• The price of Algorand is predicted to rise by 8.23% and reach $0.135946 by 16 October 2024.
• The price of Algorand is expected to have a -3.35% decrease and drop as low as $0.127 by 25 September 2024.
• In 2025, the price of Algorand is predicted to range between $0.1201 and $0.2587, with an average price of $0.2401.
• In 2030, the price of Algorand is predicted to range between $1.50 and $1.76, with an average price of $1.67.

Algorand's utility and real-world use cases

• Finance: Algorand's blockchain technology has been used by global fintech companies and has gained the interest of investors and developers. Its high transaction speed and low fees make it a viable competitor to traditional payment networks like Visa and Mastercard.
• Supply Chain: Algorand's scalability and energy efficiency have attracted companies like to use its blockchain for supply chain traceability solutions.
• Real Estate: Lofty, a project on Algorand, allows users to buy and own fractional shares of residential rental properties, lowering the barrier for the average investor to enter the real estate market.
• Humanitarian Aid: Algorand has partnered with UNDP, Mercy Corps Ventures, and other organisations to increase blockchain-based cash assistance during humanitarian crises.
• Entertainment: Algorand's blockchain has been used for NFT collections, such as Quantum Temple, which collaborates with ancestral communities to preserve cultural heritage. Additionally, gaming projects like Aegir Tactics and Fracctal are utilising Algorand's technology.
• Healthcare: Algorand's blockchain was used by to ensure data integrity in clinical trials, showcasing its potential in the healthcare industry.
• Identity: Projects like FlexID and NUVO are leveraging Algorand's blockchain for seamless identity verification, improving access to banking and government systems.

Algorand's performance against other cryptocurrencies

Algorand is facing increasing competition from other Layer 1 blockchains, such as Ethereum, Terra, Binance and Avalanche. In terms of total value locked (TVL), Algorand ranks 34th, with around $112.83 million TVL. This is significantly lower than Ethereum, which has more than $128 billion TVL, and even Terra, which has over $29 billion.

However, Algorand does have some advantages over other cryptocurrencies. It is a Layer 1 blockchain that aims to compete with Ethereum by overcoming technical barriers to decentralisation, scale and security. Algorand is also a forkless blockchain, which means it does not need to split to implement major changes or upgrades to its code.

Algorand also has fast transaction speeds, handling up to 1,000 or 1,200 transactions per second, with a five-second finality. This makes it a potential competitor to traditional payment and financial networks such as Visa and MasterCard. Algorand also has a growing NFT market, which could attract more investors.

In terms of price predictions, there are mixed forecasts for Algorand. Some sources predict that the price of Algorand will continue to decline, while others forecast that it will rebound and reach new highs in the coming years. For example, DigitalCoinPrice predicts that the price of Algorand will hit $0.40 in 2022, $0.82 in 2023, and $1.14 in 2024, with continued growth in the following years. On the other hand, WalletInvestor takes a more bearish view, predicting that the price of Algorand could drop to $0.01036 by September 2023.

Algorand's advantages and disadvantages as an investment

Advantages

• Algorand is a decentralised, open-source blockchain network with a two-tiered structure.
• It has a high transaction speed of 1,000 transactions per second and a 5-second finality, which could make it a competitor to Visa and Mastercard.
• It has low fees and is an interoperable blockchain with a growing ecosystem.
• It is listed on many exchanges, and users can gain governance.
• It is easy to use and has a rapidly growing NFT market.
• It has a weak correlation with Bitcoin, which means it could hold its own during a Bitcoin crash and be a useful diversification tool.
• It has a strong focus on real-world use cases, such as entertainment, gaming, financial institutions, and insurance.
• It is proof-of-stake, which is more environmentally friendly than proof-of-work.
• It has a strong DeFi infrastructure, which could be a hit in emerging markets.
• It has a growing influence in DeFi and NFTs.

Disadvantages

• Algorand is relatively new and untested in the real world.
• It had a bad launch, with a monthly return of -61.8% in July 2019, and it is currently in a tricky place, with its price down from $1.70 at the start of the year to $0.70.
• It is facing increasing competition from other Layer 1 blockchains, such as Ethereum, Terra, Binance, and Avalanche.
• It has a low market cap compared to other cryptocurrencies, ranking 28th in September 2022 and 60th in July 2024.
• Its price history has been volatile, with a sharp drop after its launch and an inability to exceed its all-time high of $3.56.
• Its price predictions for the short term are bearish, with some analysts predicting a further decline in price.
• It has a high level of competition, and its success is not guaranteed.

How to buy Algorand

Algorand (ALGO) is a cryptocurrency that can be purchased on various crypto exchanges. Here is a step-by-step guide on how to buy Algorand:

Find a Compatible Crypto Exchange:

Choose a reputable crypto exchange that offers Algorand, such as Coinbase, eToro, or other popular platforms. Compare the features, fees, and payment methods offered by different exchanges to find the one that best suits your needs.

Create an Account:

Sign up and create an account on your chosen exchange. You will typically need to provide personal information, including a valid ID and proof of address, to verify your identity. This process may take some time, depending on the exchange and your location.

Add a Payment Method:

Connect a payment method to your account. Most exchanges accept bank transfers, debit cards, or wire transfers. Some platforms may also allow you to use credit cards or PayPal, but these options are less common.

Place Your Order:

Once your account is set up and funded, search for Algorand on the exchange. Specify the amount you want to spend in your local currency, and the platform will convert it into the equivalent amount of Algorand. Review the details of your purchase, including fees, and confirm your transaction.

Secure Your Algorand:

After purchasing Algorand, consider transferring it to a secure crypto wallet, such as a hardware wallet, to protect your investment. Hardware wallets provide enhanced security and allow you to manage your crypto holdings offline.

It is important to note that investing in cryptocurrencies carries risks, including volatility and the potential for losses. Be sure to do your own research, understand the risks involved, and invest only what you can afford to lose.

Frequently asked questions