The Graph Cryptocurrency: Worthy Investment Or Risky Business?

The Graph (GRT) is a cryptocurrency that has been dubbed the Google of blockchains due to its ability to make it easy to organise and access data. It is an indexing protocol that works with several different blockchains and uses subgraphs to create datasets that can be shared across applications. GRT is the native token of The Graph, which is open-source software hosted on the Ethereum blockchain. It collects and stores data from blockchains such as Ethereum and Avalanche, making it searchable for users. The Graph has a decentralised ecosystem, with volunteers known as Curators, Indexers, and Delegators who process and share data. It also has a strong leadership team, including Eva Beylin, director of The Graph Foundation, who has a solid grounding in crypto and management. The Graph has had a volatile price history, and while it is currently trading at a lower price than its peak in 2021, some sources suggest that it could be a good time to buy. However, others caution that cryptocurrencies are risky investments, and it is important to do your own research before investing.

The Graph's current price and price predictions

The Graph's current price is 0.135 USD as of 4 September 2024, down from its price of $0.15 on 30 August 2024. The Graph has had a tough six months, and is currently worth about 70% less than it was at the start of 2022. However, it has appeared on the top daily gainers list a few times this year.

According to Wallet Investor, The Graph price can go up from 0.135 USD to 0.234 USD in one year. By 2029, the price of The Graph is expected to be 0.640 USD.

Digital Coin Price predicts that The Graph will reach $0.38 by the end of 2025 or early 2026. By 2026, it predicts that the GRT will start the year at $0.43 and trade around $0.53. In 2027, there is a chance that The Graph will double in price, reaching a maximum of $0.67.

Overall, The Graph has strong potential as a long-term investment, with forecasts showing the price increasing over the next few years.

The Graph's funding and investors

The Graph has raised funding through various rounds of investment. In one of its early funding rounds, the company raised $5 million in a private token sale funded by investors including Coinbase Ventures, Framework Ventures, and Digital Currency Group. The Graph also raised $2.5 million in a seed round led by Multicoin Capital. A few months before the launch of its mainnet, the company concluded a public sale round of $12 million.

The Graph is privately held and venture capital-backed. It has a decentralised ecosystem, but its activities are supported by two groups: The Graph Council and The Graph Foundation. The director of The Graph Foundation is Eva Beylin, who has a solid grounding in crypto and management.

The Graph's performance and volatility

The Graph's performance has been mixed since its launch in December 2020. It has been in the top 100 cryptocurrencies by market capitalisation, but like many other cryptocurrencies, it has had a challenging six months. It has made it to the list of top daily gainers a couple of times this year. However, it has also witnessed a significant decline, currently valued at 70% less than its price at the start of 2022, reaching an all-time low.

The Graph's price volatility is evident in its historical performance. In January 2024, it dropped below $0.14 for the first time since January 2021, and it is currently trading at around $0.15. Despite these fluctuations, The Graph is predicted to increase in value over the long term. Wallet Investor, for instance, forecasts a long-term increase, with a potential price of $0.640 by September 2029, representing a 374.07% return on investment.

Other sources offer a more detailed outlook on The Graph's potential price movements in the coming years. By the end of 2025, The Graph is expected to trade between $0.32 and $0.38, with billionaire venture capitalist Tim Draper predicting it will reach $0.38. In 2026, the price is predicted to range from $0.43 to $0.53, while in 2027, it could double in price, potentially reaching $0.64 or $0.67.

The Graph's use case and technology

The Graph is an indexing protocol that has been called the "Google of blockchains". It is an open-source software hosted on the Ethereum blockchain. The Graph collects and stores data from blockchains such as Ethereum and Avalanche, making it searchable for users. This data is organised into indices known as subgraphs, which make the querying process more efficient.

Queries are made via decentralised applications (dApps). dApps are hosted on a blockchain, rather than on company-owned servers. The dApps designed to query The Graph are written in a programming language called GraphQL, which was created by Meta (Facebook) to power its newsfeeds.

The Graph has a native token, GRT, which fuels the ecosystem's economy. The network relies on curators, indexers, and delegators, with GRT at the centre of their interactions. Curators assess which subgraphs are worth indexing and assign GRT to them. Indexers are then responsible for collecting data for the chosen subgraphs, and delegators give GRT to indexers as a reward.

The Graph also has fishermen, who verify query responses, and arbitrators, who identify malicious indexers.

GRT can be staked and has been in the top 100 cryptos by market capitalisation since its release. It has a decentralised ecosystem, supported by two groups: The Graph Council and The Graph Foundation.

The risks of investing in The Graph

The Graph (GRT) has been touted as the "Google of blockchains" due to its ability to make data organisation and access easier. However, investing in The Graph comes with several risks that you should be aware of:

Volatility and Uncertainty

The crypto market is highly volatile, and The Graph is no exception. Its value can fluctuate significantly, as evidenced by its 70% drop in 2022. This volatility is driven by various factors, such as market sentiment, news, and regulatory changes.

Regulatory Risks

The regulatory landscape for cryptocurrencies is constantly evolving and varies across jurisdictions. A sudden regulatory change or crackdown could negatively impact the value of The Graph and other cryptocurrencies. For example, some governments might choose to ban or heavily restrict crypto trading and mining, as seen in China.

Security Risks

The decentralised nature of cryptocurrencies makes them attractive, but it also increases security risks. The responsibility for safeguarding your crypto assets falls solely on you. Loss of private keys, hardware failures, or cyberattacks could result in the loss of your investment.

Competition and Market Risk

The Graph operates in a competitive space, with alternatives like Bitquery offering similar services. The survival of The Graph in a crowded market is not guaranteed, and it might not be able to maintain its position or grow its user base.

Economic Conditions

The uncertain economic climate and the fear of a recession make crypto assets riskier. A prolonged economic downturn or a "crypto winter" could negatively impact the value of The Graph and its ability to survive in the long term.

Management and Operational Risks

The lack of consistent regulations leaves investors vulnerable to deceptive or unethical management practices. There have been instances where investors have lost significant sums due to management teams failing to deliver on their promises.

In conclusion, while The Graph has its advantages and potential, it is essential to carefully consider these risks before investing. As with any high-risk investment, ensure you only invest what you can afford to lose and conduct thorough research to understand how it fits with your portfolio and investment strategy.

Frequently asked questions