Hype Asset of the Day - Tezos
With web3.0 taking off and people looking toward cheaper, more efficient Ethereum alternatives, Tezos (XTZ) could be primed to go parabolic in 2022. It’s an open-source, proof of stake (PoS) blockchain designed to rival the likes of Ethereum. It's got many of the same advantages including excellent security, decentralization, and smart contracts. Furthermore, thanks to its PoS mechanism and bustling community, Tezos is easily scalable and upgradable (something especially important when we take a look at the current state of ETH gas fees). Here at HypeIndex, we’ve been closely monitoring the buzz around Tezos and it seems many are wondering is Tezos a good investment? To answer this question, we’ve compiled a list of the positives and negatives surrounding this revolutionary cryptocurrency.
Positive Hype
With government cryptocurrency regulation cloudy at best, it’s great to see some positive news. Last year, a couple sued the IRS arguing that they shouldn’t be taxed on their Tezos staking income until they sold the asset. While most who attempt to sue the government are shrugged off, the IRS actually offered a refund of more than $3000. However, the couple didn’t take it, choosing instead to fight the battle in court. Although the offer wasn't accepted, many news outlets stated the offer could mean potential changes to regulations are likely in the near future.
One of the largest NFT marketplaces in the world, Rarible, supports Tezos as a cheaper alternative to Ethereum. This brings a large amount of ETH uses into the XTZ ecosystem.
In one of the first deals of its kind, Tezos announced a partnership with football club Manchester United. With millions watching United every game, it seems likely this endeavor will help bring cryptocurrency to the mainstream.
On the topic of partnerships, fashion company Gap has announced that they will be releasing NFTs on the Tezos blockchain.
Because Tezos is a PoS token, as its community grows, the network becomes faster and more decentralized. Additionally, Tezos has governance features, allowing holders to vote on the future of the coin. This tends to increase a project’s longevity exponentially.
Tezos is well regarded for its institutional-grade security.
Negative Hype
Although you might look at a 143% price increase over a year (2021) as a good result, in the world of crypto this is classified as a relatively small movement. While it would have undoubtedly made investors happy, there are a plethora of other coins that would’ve yielded greater results.
Likely as a result of inflation rates and a declining stock market, there have been a number of Tezos sell-offs in recent months. This has led to the price dropping around 46% from all-time highs.
Conclusion
Is Tezos a good investment? It certainly seems so. With excellent technology behind the project and an increasing number of high-profile, mainstream partnerships, it wouldn’t be surprising to see Tezos reach new heights this year. Our HypeIndex score of 100 shows there’s been a lot more positive hype surrounding Tezos in recent weeks. Therefore, it could be a great time to pick up a few XTZ while the market is still down, post inflation hikes.
HypeIndex is an AI platform that detects Hype in stocks and cryptos before it moves the market, providing reliable early detection for profitable investment opportunities.
The algorithm for our proprietary HypeIndex score is based on sentiment analysis, data science and machine learning.