Amp will continue to move higher as a collateral blockchain that ensures speedy transactions.
Amp (CCC: AMP-USD) is beginning to gain credence as collateral for blockchain transactions. AMP is the base crypto of the Amp blockchain, a collateralized token whose focus is to speed up transactions. As a result, crypto is returning to its prior peak, reached earlier in the year.
On June 16, it hit a peak of 10.9 cents per token, and by December 4, it had drifted down to 5.34 cents. That represents a drop of 51% in the last six months or so.
However, it bottomed out around 4.1 cents on July 19 and October 27. So, in the past month and a half, AMP has now risen over 30%. As a result, many investors have made a profit in the last month.
Stand Out Features of Amp
AMP can offer its blockchain as a mechanism to help make transactions go faster. It especially applies to Ethereum (CCC: ETH-USD), well-known as a slower cryptocurrency.
As Coindesk explains, Amp allows users to provide its tokens as collateral for transactions on other crypto networks, like Bitcoin (CCC: BTC-USD) and Ethereum. AMP crypto can then be liquidated as collateral if transactions take too long or are unsuccessful. That way, the receiving party still gets paid using it as the collateral for the transaction.
AMP can collateralize any account, application, or transaction and “carry” balances directly verifiable on Ethereum. It can also act as a smart contract collateral manager. It can lock, release and redirect collateral in partitions to support value transfer activities, according to CoinMarketCap.
As it stands now, AMP had a market value of $2.25 billion as of December 4 and is ranked as the 63rd most prominent cryptocurrency. So it is not an insubstantial blockchain by any means. As it gains credence as a collateral mechanism making transactions operate safely, its value will continue to rise.
However, one of the problems I see with Amp is that it has not moved into newer areas that investors are interested in. For example, I don’t see any movement by Flexa, the company behind Amp, to move into smart contracts, decentralized finance (DeFi), or decentralized apps (dApps).
More specifically, I believe it will need to cut out some non-fungible token (NFT) niche. It is what helps push a cryptocurrency higher these days. Maybe Flexa can develop some solution that can provide for owners of NFTs other than just acting as collateral in transactions.
Where This Leaves AMP Going Forward
So far this year, it has been on a terrific run. It ended last year at 0.66 cents per token. So at its December 4 price of 5.34 cents, it is eight times the price it started at the end of the year. That is a fantastic return for most investors.
But will it repeat this performance going forward? Not likely. That would imply it would move to more than $18 billion market capitalization. Although theoretically possible, it seems highly unlikely.
There is minimal visible marketing spending and very little news about new collaborations or partnerships. I would expect to see a lot of that sort of thing if the crypto had a chance of rising another eight times.
However, assuming that Amp continues to gain belief to speed up transactions and make them safer, expect to see it rise consistently higher. I would not be surprised to see AMP 20% to 50% higher over the next year.
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