Three reasons why ATOM prices are near all-time highs

Time:2022-01-08 Source: 792 views NFT Copy share

The newly released Ethereum cross-chain bridge and the upcoming Theta upgrade are expanding the Cosmos ecosystem, and have also become catalysts for the recent 75% increase in ATOM.

Blockchain network interoperability is becoming one of the main topics in the cryptocurrency ecosystem in 2022. New users are continuing to enter the ever-growing world of crypto, while nascent and established projects are looking for the chain that best meets their protocol and community needs.

One project with a bullish start to 2022 due to its focus on facilitating communication between independent networks is Cosmos (ATOM). Calling itself the “Internet of Blockchains,” the project aims to foster the development of an interconnected, decentralized economy.

Data from Cointelegraph Markets Pro and TradingView show that ATOM’s price has rallied 75% since hitting a low of $25.06 on Dec. 30, hitting a daily high of $43.98 on Jan. 4 as its 24-hour volume surged to $2.54 billion.

Three reasons why ATOM prices are near all-time highs

The three reasons for the surge in the price of ATOM include the launch of a cross-chain bridge, making the protocol compatible with the Ethereum Virtual Machine (EVM), and the upcoming Theta upgrade, which will rapidly expand the ecosystem of connected chains and applications.

Cosmos is compatible with the Ethereum Virtual Machine

The most important development powering the rise in ATOM is the launch of Evmos, an EVM-compatible protocol that will allow assets and projects operating on the Ethereum (ETH) network to migrate to the Cosmos ecosystem.

So far, Ethereum-based projects have not had a way to interact with the Cosmos ecosystem. This greatly limits the number of projects and tokens that can interact with DeFi and NFT projects in the Cosmos ecosystem.

Gravity Bridge, which launched on Dec. 15, is another project dedicated to facilitating asset bridging between Ethereum and Cosmos, and it currently operates as a separate chain. There are currently plans to migrate to the Cosmos Hub in early 2022.

Getting ready for the Theta upgrade

The second gust of wind for Cosmos comes from the protocol’s upcoming Theta upgrade, which is expected to activate on March 31.

Some of the new features included in the upgrade include the addition of meta-transactions, where transactions can be submitted through separate accounts that receive prompts, and the introduction of inter-chain accounts that allow users to manage accounts across multiple blockchains. Another feature is Liquid Staking, a system for users to stake asset value against other parts of the Cosmos ecosystem.

Theta upgrade also includes an NFT module that enables simple management of NFT identifiers, owners and related data.

Ecological expansion is usually good

The third reason for ATOM’s bullish momentum is the expansion of the ecosystem to 28 active, interconnected chains with a combined value of over $68 billion.

Some of the more established chains that have joined the Cosmos ecosystem include Binance Smart Chain, Terra (LUNA), and Crypto.com (CRO), while the largest projects using Cosmos’ software development kit (SDK) include Osmosis (OSMO), Secret ( SCRT), Oasis Network (ROSE) and Kava (KAVA).

The number of chains connected to the Cosmos hub will likely increase as bridge protocols are established to connect Cosmos and other EVM-compatible networks. This will increase the total value of the ecosystem as well.

VORTECS® data from Cointelegraph Markets Pro started to detect a bullish outlook for ATOM on Dec. 29, ahead of the recent price rally.

Cointelegraph's exclusive VORTECS® score is an algorithmic comparison of historical and current market conditions with data points including market sentiment, trading volume, recent price movements and Twitter activity.

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