ALGO coin price prediction: Will ALGO bounce back?

Contents

• What is Algorand?
• From the Algorand white paper
• ALGO’s price history
• Price spike
• El Salvador partnership
• What’s next for ALGO?
• FAQs

Since launching in 2019, the algorand (ALGO) cryptocurrency has struggled to pass its initial coin offering (ICO) price.

ALGO’s price skyrocketed in September 2021 when the blockchain formed a partnership with Koibanx to build El Salvador’s cryptocurrency infrastructure. So, what is next for the altcoin? First, let’s look at how the Algorand blockchain works and its price history.

What is Algorand?

ALGO is the native currency on Algorand, a blockchain that wants to address the trilemma of security, speed and decentralisation. Alogrand achieves this aim through a consensus system called pure proof-of-stake, which creates and validates its blocks. The block leader and validating committee are randomly selected but it is weighted by the amount of ALGO a user stakes.

Silvio Micali, a professor at the Massachusetts Institute of Technology (MIT) in the US, founded Algorand in 2017 with the blockchain and native currency launching in June 2019. Only a day after launching, the ALGO coin price immediately crashed.

From the Algorand white paper

The ‘Algorand Theoretical Paper’ was originally published on 26 May 2017 and is 75 pages long. The white paper states: “Algorand is a truly democratic and efficient way to implement a public ledger.

“Unlike prior implementations based on proof of work, it requires a negligible amount of computation and generates a transaction history that will not fork with overwhelmingly high probability.”

It goes on to say: “The Algorand approach applies to blockchains and, more generally, to any method of generating a tamper-proof sequence of blocks. We actually put forward a new method – alternative to, and more efficient than, blockchains – that may be of independent interest.”

ALGO’s price history

ALGO’s ICO was held in June 2019 with the price at $2.40. On 22 June, its first day of trading, the price dropped to $2.16. This was just the beginning as the price continued its bearish trend throughout the next few months, reaching a low of $0.19 on 27 September.

There are many influences behind this crash. The first was the expanding token supply of 10 billion that would gradually be released. Algorand announced three billion ALGO would be released over the first five years from its launch date through public auctions. The large pool of ALGO, combined with investors valuing it at $24bn, was too much for the market despite the strong public interest.

Private investors were another possible cause of ALGO’s coin price crash. Investors bought ALGO in private placement rounds that set a price for the coin from $0.05 to $0.50. By the time the token launched it was valued at $2.16, which enabled private investors to gain large profits.

Chen Fangfang, the previous head of operations at the Algorand foundation, wrote a letter to the investment community. According to Global Coin Research, the letter said that early supporters had injected unnecessary risks into the project, including dumping tokens and short-selling.

Price spike

ALGO’s coin price did see a spike on 14 August 2019, when it was listed on Coinbase. Algorand claimed it was one of the fastest on the platform. The price was around the $0.56 mark in July and reached $0.80 on 9 August when the news was announced. Despite a few spikes, ALGO struggled to get above the $0.50 mark over the next 18 months of trading, let alone surpass its launch price.

The native currency started seeing a bullish trend at the beginning of 2021. Throughout January it was priced around the $0.56 mark, but on 12 February it made a multi-year high of $1.71.

As with ALGO’s coin price crash, this spike had several potential reasons. The first, at the beginning of 2021, was the interest in stablecoins. Stablecoins combine the decentralised nature of cryptocurrency with the stability of fiat money. As Ethereum had high gas prices at the beginning of 2021, Algorand became a viable alternative for stablecoin issuers.

Algorand was also generating interest through a partnership with Instimatch Global, a short-term money market trading platform. This started in January and by February, millions of dollars in transactions per quarter were going through Algorand.

El Salvador partnership

ALGO’s coin price did dip below the $1 mark between May and August 2021. However, it has recently gained interest and seen its price rise. On 31 August, El Salvador announced its cryptocurrency infrastructure would be built on Algorand. The coin was then trading at around $1.12. Over the course of the following few days, the price shot up to a new post-launch all-time high of $2.38 on 12 September. 

On 29 September, Algorand launched a new update that improved smart contracts by allowing them to be written in well-known computer languages including Python and Reach, but that did little to help the downward trajectory, and the coin closed the month at $1.63.

Prices were very volatile between October and December, but continued trading sideways, and closed 2021 out at $1.66. The coin fell further to $0.90 by 14 February 2022, the coin’s lowest value since August. As of 16 February 2022, and at the time of writing, the coin is currently valued at around $0.95. Is a bull run around the corner, or is the price likely to decline?

The token put on a good show in 2021, staying above previous averages and reaching a new all-time high in September. That said, the volatility typical of lower-value altcoins was on full display, making a valid ALGO coin price prediction difficult. Closing trades fluctuated widely throughout 2021, and plummeted again after recording the early January 2022 peak of $1.79.

As of 17 February, the coin is trading at around $0.95. The RSI is neutral, but the long-term moving averages remain firmly in the sell position. The shorter-term moving averages suggest buying. Out of a panel of 26 indicators on DigitalCoinPrice, 11 suggest selling, 12 suggest holding and three suggest buying.

Let's take a look at some of the ALGO coin predictions from various forecasters.

What’s next for ALGO?

Gov.Capital’s ALGO coin price prediction for 2022 sees the coin breaking the $1.50 mark as early as September. The site suggests the coin will breach the $3 mark in February 2023. The ALGO price prediction for 2025 is for the coin to break the $10 mark in April. 

WalletInvestor also has a positive Algorand price prediction. It sees the coin breaking the $1.50 mark in October 2022, and the $3 mark in February 2024. The site describes ALGO as an “awesome long-term (one-year) investment”.

DigitalCoinPrice projects an average value for the coin of $1.41 in May 2022, an upswing of almost 50%. The site also suggests the coin could be worth $1.53 in 2023, $1.63 in 2024, and $2.01 in 2025. The ALGO price prediction for 2030 is for the coin to reach up to $4.59.   

FAQs