As 2021 winds down, investors are looking ahead toward the coming year. Many are attempting to identify the cryptos that will breakout. One such name that has received considerable speculation as an altcoin destined for growth is Algorand (CCC:ALGO-USD). Indeed, just last month ALGO was touted as the next Solana (CCC:SOL-USD), one of crypto’s breakout stars of 2021. The native cryptocurrency of the blockchain-based cryptocurrency protocol is having a good day so far after some recent news has sent ALGO prices shooting up this morning in a twist that has crypto and altcoin investors watching keenly.
What’s Happening With ALGO Prices?
Algogrand recently launched Algofi, its first algorithmic money market and stablecoin. Yesterday, a company blog post announced that this venture would be partnering with the Algorand Foundation for the distribution of two million ALGO tokens. That’s worth roughly $3 million worth in total. It is scheduled to take place during the first quarter of 2022 as part of the Aeneas Liquidity Program. Additionally, to announce the initiative and explain what it means for investors, the company tweeted the following yesterday:
With the recent launch of @algofiorg, users can now lend and borrow against their ALGO, USDC, goBTC & more. Learn more about their platform and a new initiative that will distribute 2M ALGO to Algofi users in Q1 2022 👉 https://t.co/rUqNmZqQDf pic.twitter.com/TFTPtrWfAz
— Algorand (@Algorand) December 29, 2021
This news has been excellent for ALGO prices, which were quick to respond positively. As of this writing, they are up 14.6% on the day, taking the week’s gains to almost 26%. The crypto saw its prices dip following the Christmas holiday. However, this type of overall progress should be reassuring for investors as the new year unfolds.
Why It Matters
U.Today reports that The Algorand Foundation expects this “$3 million Liquidity Mining Initiative” to help spur Decentralized Finance (DeFi) adoption across platforms. Indeed, it hopes to further demonstrate that the technology is here to stay and play a vital role in financial markets. The article also noted that ALGO’s total value locked (TVL) had risen to $108.05 million at the time of publication. But recent data indicates that it has already risen further, currently sitting at $110.37 million.
However, this news hasn’t been the only factor driving ALGO prices higher. The platform has been working hard to provide blockchain infrastructure for other nations, and this mission has been working well far. In September 2021, El Salvador’s government announced it would use Algorand’s blockchain system to develop its own infrastructure system as it embraced cryptocurrency, causing prices to spike. InvestorPlace contributor Will Ashworth recently touted the utility of Algorand though he raised some concerns about the potential for success of El Salvador’s mission.
All in all, there’s no question that ALGO has considerable potential, though just how much remains to be seen. The team behind Algofi describes it as making “decentralized lending broadly accessible.” It’s a noble mission. And if it proves to be true, this initiative is likely to help spur ALGO prices further throughout the coming year. This is especially true as DeFi adoption continues to spread across financial markets. While the crypto’s short-term future has raised some speculation from thinkers such as Ashworth, long-term Alogrand price predictions remain high.
What It Means for Algorand
Algorand’s team is smart to be making moves to help spur DeFi adoption. It’s a trend that is likely to increase in 2022. However, the opportunity is still there for innovative blockchain platforms to gain further traction and credibility.
If ALGO prices can rise this much on an announcement, it’s certainly worth watching to see how they will react as the initiative gets underway.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.