Is Now A Good Time To Buy Cosmos (ATOM)?

The post Is Now A Good Time To Buy Cosmos (ATOM)? by Reid McCrabb appeared first on Benzinga. Visit Benzinga to get more great content like this.

Looking to buy Cosmos (ATOM)? Luckily, it’s offered by multiple fantastic exchanges including Coinbase!

The Cosmos network refers to itself as the internet of blockchains. It claims its blockchain is gen 3.0, built on Bitcoin (gen 1.0) and Ethereum (gen 2.0). Bold statements such as these are not unusual in crypto; what is unusual is for the blockchain to actually live up to the potential of the technology that it boasts. The recent announcement from decentralized exchange dYdX – leaving the Ethereum ecosystem for Cosmos – could be seen to some that Cosmos’ claims are valid. Now could be the best time to buy Cosmos if more monolithic platforms move to the network.

Cosmos uses a proof-of-stake (PoS) consensus method to secure the chain, leaving a significantly smaller carbon footprint than blockchains operating on a proof-of-work (PoW) consensus. Cosmos also has incredibly low fees and fast transaction speeds – with fees of $0.01 and transaction finality of just a few seconds.

Currently, there are over 255 apps and services operating in the Cosmos ecosystem, totaling over $46 billion worth of digital assets. At the center of the Cosmos Network is the Cosmos Hub, a blockchain that provides vital services, including securing the network and exchange capabilities to the Cosmos’ interchain. The interchain is described on the Cosmos website as “an innovation that enables you to freely exchange assets and data across sovereign, decentralized blockchains” via Cosmos. 

However, with fast transactions and low fees becoming the norm for new Layer 1s – was the dYdX news bullish enough to make now a good time to buy Cosmos?

Is Now a Good Time to Buy Cosmos?

With lots of fear in the crypto market, prices have receded. To some, the drop means a buying opportunity; others see the dip continuing. Bitcoin dropped below $20,000, and most altcoins, including Cosmos, have followed this move downward. 

While it is not for certain, Bitcoin’s last cycle saw a dip of roughly 80% – so if this pattern is repeated the BTC bottom would not hit until roughly $12,000 per coin. Again, this level is not a foregone conclusion, and calling bottoms is incredibly difficult. However, if this happens, Cosmos will almost certainly fall with it – Cosmos’ token ATOM has dropped in price from a high of $44.70 to $5.59, just in the past year. 

How Long Will the Crypto Bear Market Last?

Everyone wants to know how long this downturn in the market will last. The many factors affecting the crypto market as well as broader markets make it difficult to formulate when this shift will take place. Record-low consumer sentiment, record-high inflation, the war in Ukraine, interest rate hikes and many more issues affect the U.S. economy. No asset class has been able to escape this downturn.

If the stock market goes into recession, which is classified as two consecutive quarters with negative year-over-year growth in GDP, then crypto is likely to continue to hurt. Investors are looking for any sort of positive news to see a light at the end of the tunnel. 

The easy money era is over (for now at least), and crypto will need to show value, not just hype and speculation. In a recent interview by Fortune, the billionaire Shark Tank investor Mark Cuban stated his opinion on the state of the market — “In stocks and crypto, you will see that companies that were sustained by cheap, easy money — but didn’t have valid business prospects — will disappear…Like [Warren] Buffett says, ‘When the tide goes out, you get to see who is swimming naked.’”

Will Cosmos Ever Reach All-Time Highs? 

Cosmos could reach its all-time high again but first, the macro environment must shift. To regain its roughly $45 high, Cosmos will need to see people buying crypto again. For its price to exceed its all-time highs, the chain will need to continue to poach large projects from the Ethereum ecosystem. If projects value operating their own chain, rather than building on Ethereum or one of Ethereum’s Layer 2s, then Cosmos has a real chance of seeing future gains.

Is Cosmos (ATOM) A Good Long-Term Investment?

Cosmos has real utility in providing an easier way for projects to build their own chain. However, they are not the only chain that boasts this feature and will not be the last. If Cosmos can build in the bear market, then it could be positioned to succeed in the long term.

How to Buy Cosmos (ATOM)

If you are a U.S.-based investor, then you could purchase Cosmos (ATOM) through an exchange such as Coinbase, Binance.US, KuCoin or FTX. It is important to do your due diligence on which trading platform to use; with the failure of a number of platforms in this recent crash, many consumers are losing their assets. So, be sure to read the fine print on who is actually holding your crypto and what is being done with it. Also, assessing exchanges’ risk of failure is important. Generally, cryptocurrency investors use centralized exchanges over decentralized ones without realizing the inherent risk of not holding their cryptos in a personal wallet.

How to Store Cosmos Safely

You can choose from a few storage solutions outside of letting a trading platform hold your keys. The safest is through a hardware wallet. The most popular brand of hardware wallets is Ledger, which offers three fantastic models — the Nano S, Nano S Plus and Nano X. Cryptocurrencies can be purchased, transferred, staked and more through a software wallet. While there are many uses, your keys could be exposed to phishing hacks. Transferring to a hardware wallet, often referred to as cold storage, limits some usability of your crypto but provides a safer system of storage.

How Does Cosmos Fit in the Bigger Picture? 

While Cosmos is often compared to Ethereum and Solana, it is actually more similar to the Avalanche blockchain. Cosmos facilitates creating “zones” that are connected to the Cosmos hub. This feature ultimately means that users develop their own chains, and the Cosmos hub acts as a tool to keep the zones interoperable with each other. 

This protocol is like Avalanche’s “subnets,” which are similar in design. The subnets are separate blockchains that are tied to the Avalanche ecosystem. While there are some technical differences, the overall theme of building your own chain is the same.

So, Is Now a Good Time to Buy Cosmos (ATOM)?

If you are looking to start deploying capital, then Cosmos could be a good investment for the long term. It depends on your risk tolerance and whether you believe Cosmos can attract more users and platforms. However, liquidity is at a premium at the moment, and deploying yours could cause some pain in the near term. Catching a falling knife is never easy. Implementing a plan and not overextending yourself is highly encouraged, especially in times of uncertainty.

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The post Is Now A Good Time To Buy Cosmos (ATOM)? by Reid McCrabb appeared first on Benzinga. Visit Benzinga to get more great content like this.