What Drives Cosmos (ATOM) Near New Highs
Cosmos (ATOM) rode on the overall market recovery late on Thursday, but became one of the biggest gainers for the day. ATOM repeated its positive performance, keeping some of the gains even as the market turned downward again, sinking Bitcoin (BTC) toward $38,000.
Altcoin prices also showed more bullish attitudes, while Ethereum (ETH) diminished its dominance further to around 19%. After a correction that erased around 60% from last year’s highs, some altcoins are renewing their specific trajectories based on unique growth factors.
ATOM traded on a temporary peak at $41.85, close to its all-time peaks around $43.61 logged in the past few weeks. ATOM is rising on a series of partnerships and news of network growth, as well as perceptions the asset can move to a higher valuation based on attracting startups to its blockchain. Later on Friday, the asset retreated to $38.10.
ATOM Offered as ETP Investment
One of the immediate reasons for growing interest in ATOM is the announcement of a new investment product for physical investment in ATOM. Built by 21 Shares, the product will take up additional ATOM and remove the coins from the market. The investment opportunity also mentioned the metaverse capabilities of the Cosmos network. The announcement arrives at a time when blockchain-powered metaverse projects are promising to build new applications and games.
The product will be available for fiat investment in USD, EUR and CHF on the SIX Exchange, a Swiss-based market. For now, products based on digital assets have been easier to launch in the EU, while the US has blocked most attempts to build a coin-backed Bitcoin ETF.
Unlike the tools of Grayscale Capital, the entire value of the ATOM ETP will be backed by the same value of coins kept in cold storage. The product will offer plain vanilla trading without derivatives. At this point, ATOM volumes on the ETP may be small in comparison to the usual spot and derivative markets for ATOM.
ATOM derivative trading is also highly influential, leading to short squeezes that caused the latest rally to $40.
While most EU-based traders can easily buy or exchange ATOM on the Kraken markets and through various brokerages, the ETP adds to the influence of crypto assets for mainstream buyers. However, holding the ETP version will not pay out staking or delegation reward like holding actual ATOM.
Will ATOM Reach New Peak
So far, ATOM has repeated its peak several times, but failed to move above $50. ATOM went on to erase some of its value on volatile trading. ATOM remains one of the most actively traded platform assets, though its leading pairings on Binance International and Coinbase show some potential for slippage with active selling.
ATOM easily erases as much as 50% from its value from the peak, with recent prices starting the new climb from lows around $20.
Builders Turn to Cosmos
The latest interest in ATOM coincides with the arrival of new chains building on the Cosmos protocol. Smart contract startups add to the mix and may bring more dApps to the “Internet of blockchains”.
The other big source of growth for ATOM is from the expected inflow of blockchain games, known also as play-to-earn games.
Strange Clan is one of the first projects to choose the Cosmos protocol for its game.
The game will offer an immersive 3D experience, with the chance to buy virtual tokens to represent land plots within the game ecosystem.
ATOM Has BSC Advantage
One of the advantages for ATOM is that the token is also present on Binance Smart Chain (BSC). The representation is significant, with more than 29,206 addresses on BSC.
This is one of the reasons ATOM is also trading with a price anomaly, at around $38 on the Binance ATOM/USDT trading pair, and at above $41 on other exchanges. This includes PancakeSwap, the decentralized BSC exchange.
ATOM also has an advantage through its KuCoin trading, where prices often exceed $42. Overall, the recent climb at one point extended the gains to more than 12% for an average ATOM price at $41.79.
Staking Adds to ATOM Value
ATOM is an asset with an incentive for staking and passive income. More than $7.4B in ATOM have been staked, lining up the Cosmos protocol as one of the most rewarding.
Staking ATOM by delegation can bring annualized returns at around 13.62% depending on overall staking conditions.
Cosmos Partners with Other Major Networks
Cosmos has already settled partnerships with some of the more significant DeFi ecosystems. Through Near Protocol (NEAR) and Terra (LUNA), Cosmos will be open to transfers for UST, one of the dollar-affixed assets that is growing in adoption for DeFi and gaming.
The ATOM asset is now tied with demand and hype for some of the biggest winners in the past year, with a constant source of renewed interest and potential price discovery.
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