Algorand is an up-and-coming blockchain project that started as the brainchild of an Italian math professor. The platform’s performance looks volatile in the short term, but a patient investor could see a strong return on investment.
|Algorand at a Glance|
|Market Cap||Approximately $2.22 billion|
|All-Time High||$3.28 on June 21, 2019|
|All-Time Low||$0.1024 on March 13, 2020|
In 2015, MIT professor Silvio Micali asked whether there was a better way after researching Bitcoin’s beginnings. He knew the cryptocurrency’s anonymous creator, Satoshi Nakamoto, was onto something, but Micali wanted to create an “inclusive and transparent system.”
Algorand, which officially launched in 2019, runs on a pure proof-of-stake methodology. This platform stands out because it’s a non-adversarial system based on all participating users receiving a proportional stake. The platform’s native cryptocurrency is ALGO.
Aside from Algorand’s unique approach to consensus, the network processes payments at a speedy 1,000 transactions per second — and takes five seconds to finalize them. This, combined with the network’s scalability, its security and Ethereum’s rising gas fees, makes Algorand a strong choice for the discerning developer.
Likely one of the most ambitious attempts to solve the “blockchain trilemma,” Algorand balances security, scalability and decentralization. Additionally, transaction fees are minimal compared to its Ethereum counterpart.
Algorand Price Prediction
In 2021, ALGO bottomed out at $1.269 in mid-December before rallying to $1.645 for the new year. The coin continued its upward trend to $1.851 on Jan. 5, 2022, but tumbled as the sector moved into a bear market, or crypto winter.
ALGO continued to decline until mid-May. It’s been fairly level since then, hovering around the $0.30 mark.
Edith Yeung, a partner at Race Capital, told CNBC that the crypto winter could be a “warm” one that shakes out short-term investors as the industry moves toward Web3. “Crypto is really about Web3,” she said.
Other analysts are less optimistic, citing bankruptcies resulting from the collapse of terraUSD and bad trading bets, as well as uncertainty around the Fed’s monetary policy. In either case, it goes without saying that predicting future prices is difficult at best.
Q3 2022 Prediction
With a bearish trend tamping down crypto prices, the platform might struggle. Coinpedia predicts ALGO could dip to $0.2807. Nonetheless, Algorand could grow with new partnerships, integrations or developments. In this case, Coinpedia predicts ALGO could reach a high of $0.4151.
The Changelly blog offers slightly more optimistic predictions, with a low of $0.40 and a high of $0.43 in September 2022.
Q4 2022 Prediction
Coinpedia predicts potentially brighter things for ALGO if the platform commits to environmentally friendly NFTs, with a conservative bump up to $0.4542 — or even up to $0.5557. However, a turn for the bearish worse could have ALGO finishing the fourth quarter at $0.3721.
Changelly is less bullish on ALGO, predicting a low of $0.40 and a high of $0.43 in December.
What Will Algorand Be Worth in 2025?
Coinpedia offers its most bullish prediction for ALGO’s value in 2025 at $2.2966, while conservative estimates predict a price of $1.7026.
In the longer-term, Changelly is less optimistic, offering a predicted low of $1.18 and a high of $1.39.
What Will Algorand Be Worth in 5 Years?
Five years is a long way out for price predictions, and the crypto market is known for its volatility, but AMB Crypto used machine learning to simulate possible ALGO values in 2027. Algorand could potentially be worth $7.556 to $8.398.
Changelly offers a more conservative prediction for Algorand in 2027 — a low of $2.43 and a high of $2.86.
Algorand has two main competitors: Cardano and Solana.
Cardano is a serious crypto player and with a market cap of just over $17 billion — miles ahead of Algorand’s modest start. Cardano also takes pride in academia’s role in its development, like Algorand does with its MIT origin story.
Cardano works on a proof-of-stake method that is similar in concept but different in implementation. With the introduction of smart contracts in 2021, Cardano enabled developers to start building decentralized apps on its platform, and new money continues to flow into those projects.
Founded by Anatoly Yakovenko in 2017, Solana uses a hybrid consensus method — a distinctive proof-of-history and proof-of-stake model — and boasts a theoretical potential speed of 710,000 transactions per second. Solana’s market cap sits at about $13.28 billion on Sept. 12, 2022.
Is Algorand a Good Investment?
Despite the platform’s illustrious MIT beginnings and capital investment from Union Square Ventures — the firm that backed Twitter, Coinbase and Etsy — there are still many challenges ahead. Algorand is a newer network, and only time and trial can season this startup.
Cited as an “Ethereum killer,” Algorand wants to solve real problems with smart contracts. Since its launch, the network has signed some big players, including partnerships with FIFA and health care payments processor MAPay. More recently, Algorand expanded its availability through Amazon Web Services.
Blockchain data firm Chainalysis reports Algorand saw 65% growth in transaction volume in Q3 2021, while Bitcoin and Ethereum transaction volumes plunged by 37% and 45%, respectively. However, the firm attributes this to Algorand’s “growing hype” as a newer blockchain project.
Another consideration is Algorand’s competitors. Networks like Cardano and Solana make similar promises and have been around long enough to prove them. However, Algorand wants to transform how business is done and is funding a burgeoning ecosystem to get there.
Algorand shows promise but must grow into its potential. Speculating on the token’s worth in the short term carries significant risks. However, if it manages to carry through on its promise, it could be an excellent investment in the long term. As with all investments, it’s important to never invest more than you can afford to lose.
Daria Uhlig contributed to the reporting for this article.
Information is accurate as of Sept. 12, 2022, and is subject to change.