- Bancor is a leading player in the decentralized exchange (DEX) industry.
- The platform enables people to both invest and trade digital assets.
- This prediction looks at what to expect in 2023 and beyond.
Decentralized Finance (DeFi) is one of the biggest industries in the crypto sector. According to DeFi Llama, the total value locked (TVL) in the industry has surged to over $41 billion in the past few years.
There are many sub-sectors in DeFi, including decentralized exchanges (DEX), liquid staking protocols, lending networks, and Real World Asset (RWA) tokenization. This article will look at Bancor, a leading player in the DEX industry.
What is Bancor?
Bancor is a DEX that enables people to buy and sell cryptocurrencies in an easy and affordable way. It is made up of several components. Carbon DeFi is a decentralized protocol for automated on-chain trading strategies.
ArbFastLane is a permissionless protocol that enables people to perform arbitrage between Bancor and external exchanges like Uniswap and PancakeSwap. Further, Bancor3 is a single-sided liquidity and on-chain trading platform that is powered by automated market makers.
All these parts are overseen by BancorDAO, a Decentralized Autonomous Organization (DAO) that performs network upgrades and votes for the platform. Bancor is powered by BNT, an ERC 20 crypto token that is used for voting and other on-chain operations.
According to CoinMarketCap, BNT had a market cap of more than $75.2 million, making it the 305 biggest cryptocurrency in the world. The maximum supply of the token is 161,196,921 while the circulating supply was over 141 million tokens.
Bancor is a relatively small player in the DEX industry. According to DeFi Llama, the network has over $74 million in total value locked.
Read more: How to buy Bancor.
What affects Bancor’s BNT price?
BNT, the network’s token, is affected by several factors. First, like other cryptocurrencies, it is mostly driven by the performance of Bitcoin, the biggest cryptocurrency in the world. In most cases, cryptocurrencies rally when BTC rises and vice versa.
For example, in mid October, most cryptocurrencies pumped as hopes of a spot Bitcoin ETF approval raised. Bitcoin jumped from $25,000 to $35,000 while the total market cap of all digital currencies soared to over $1.3 trillion.
Second, BNT price is affected by key developments in the crypto industry. For example, it dropped sharply following the FTX collapse in November 2022. It also plunged after the collapse of Terra and its ecosystem.
Third, it is impacted by macro events such as the actions of the Federal Reserve. In most cases, cryptocurrency prices jump when the Fed has embraced a dovish tone and vice versa. They also drop when the Fed hikes rates or points to more increases in the future. These actions explain why BNT price dropped sharply in 2022.
Finally, BNT is impacted by internal information by Bancor. Some of the top internal things that could move the token are improved user growth, a major ecosystem vote, and new product launches and upgrades.
BNT price history
Bancor’s BNT token has gone through the boom-and-bust cycles in the crypto industry. The first big pump happened in 2017 when Bitcoin jumped to almost $20,000 for the first time. In this period, the token jumped to an all-time high of $10.57.
As Bitcoin crashed later on, the token crashed to a record low of $0.1300. It then started a major bull run during the Covid-19 pandemic. That period was characterized by substantial excesses because of low-interest rates, huge savings, and government stimulus policies. The surge saw Bancor’s token jump to over $9.40 in 2021.
BNT price then collapsed in late 2021 and 2022 as inflation jumped, forcing the Federal Reserve to embrace a hawkish tone.
BNT price prediction 2023
BNT price has been in a tight range in 2023 as interest rates have remained at the highest level in more than two decades. It has remained between the key support at $0.32 and resistance at $0.7140.
One of the best ways to predict the next BNT price outlook is to use the Wyckoff Method. Wyckoff explained four stages that assets go through, including accumulation, markup, distribution, and markdown.
The accumulation stage is characterized by low volume and an asset that remains in a tight range. Therefore, we can assume that the coin is now in the accumulation phase. It will then move to the markup phase, where demand is usually higher than supply.
There are two triggers for this. First, Bitcoin has made a bullish breakout because of ETF hopes. And second, as the American economy slows, there is a likelihood that the Federal Reserve will end its rate hikes.
The next key catalyst will be the upcoming Bitcoin halving. Historically, cryptocurrencies tend to rise ahead of Bitcoin’s halving event. Therefore, we can’t rule out a situation where Bancor price makes a bullish breakout in 2023. This view will be confirmed if the coin moves above the key resistance at $0.7141.
Bancor price prediction for 2024
2024 will likely be a good year for cryptocurrencies as three things intersect. First, the Fed will likely start cutting interest rates in the second quarter of the year. In most cases, risky assets like cryptocurrencies do well when the Fed is cutting rates.
Second, Bitcoin has always done well when there is a halving event. And finally, companies like Blackrock and Invesco will start buying Bitcoin for their ETFs. Therefore, all this means that coins like Bancor will do well.
The main risk for Bancor and other cryptocurrencies is the ongoing Coinbase and Binance lawsuit in the US. A negative verdict will likely have a bad impact on the coins.
