Cosmos (ATOM): An Innovative Bridge between Blockchains

Cosmos (ATOM): An Innovative Bridge between Blockchains

Cosmos (ATOM) is an innovative blockchain system that connects different users and sub-systems, enabling them to exchange data through inter-blockchain protocol. Cosmos enables users to effectively shift from one blockchain to another, thus ensuring the maximum satisfaction of their needs with the possibility of integrating the functionality of different systems in the most appropriate manner.

Cosmos relies on a more innovative proof-of-stake mechanism that contributes to the maximum flexibility and adjustability to changing external conditions of the crypto market. The major competitive advantage of Cosmos (ATOM) in regards to other platforms is eliminating the barriers between blockchains and facilitating data and information exchange.

ATOM is mostly used to cover transaction fees, and the growing demand for inter-blockchain solutions is expected to result in the higher price of the ATOM token and increasing capitalization of Cosmos in general.

ATOM encourages staking through high staking rates offered to validators, thus increasing the overall stability of its network. In addition, all ATOM holders become able to participate in governance, and they can affect the changes in internal policies and regulations in regards to Cosmos’ functionality and services offered.

ATOM’s current price equals $26.83, and its estimated total supply is around 287.4 million. ATOM does not have the maximum supply as it can be adjusted to the changes in the demand for tokens and other crypto market conditions that are identified as being important by ATOM holders.

Its current market capitalization is $7.7 billion, making it the 20th largest cryptocurrency by market capitalization.

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Figure 1. Dynamics of ATOM’s Prices (USD, ETH); Data source – CoinGecko

Overall, ATOM’s price demonstrates the close correlation with that of Ethereum, indicating their close interdependency. The reason is that most users demonstrate a direct interest in Ethereum’s blockchain, and the changes in ETH capitalization affect profit-generation opportunities for Cosmos. From a strategic perspective, the close correlation with Ethereum’s price dynamics is positive for ATOM, indicating the growing investors’ interest in Cosmos’ functionality and innovative blockchain solutions.

Investing in ATOM: Opportunities and Risks

Although Cosmos (ATOM) is one of the most dynamic crypto projects that have proven their market value to many investors, there are still considerable concerns in terms of its dependence on the general dynamics of the crypto industry and BTC and ETH prices. In the long run, Cosmos remains a potentially profitable investment with the potential of capitalization growth above the average market rate in the long run. However, the short-term price dynamics of ATOM illustrates the prevalence of bearish expectations among investors.

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Figure 2. 1-Month Dynamics of ATOM Price (USD); Data Source – CoinGecko

Cosmos currently follows the downward trend within the downward price channel confirming the high likelihood of further price decline in the following weeks. Therefore, selling positions appear to be reasonable in this regard as there are no preconditions for radical changes in the market dynamics. Only if ATOM’s price shifts upward from the existing channel, the emergence of a new market trend may be possible. Therefore, the maximum flexibility and adjustability to market conditions should be demonstrated by Cosmos’ investors.

Dmytro Kharkov

Holding a Master’s Degree in Finance (Distinction), Dmytro Kharkov has proven expertise in Business Analytics, Data Analysis, and the crypto market. He has completed online courses on Machine Learning and Data Science from the leading universities and online schools. He closely monitors the latest crypto analytics insights from Glassnode, IntoTheBlock, Santiment, etc.