Algorand is a decentralized, open-source blockchain network that uses a two-tiered structure. Released in mid-2019, Algorand rapidly made its way up to become in the top 30 cryptos based on market cap. At 1,000 transactions per second and a 5-second finality, many are thinking the same thing: is Algorand a good investment?
This article will dive into the unique aspects of this Proof-of-Stake mechanism, and ultimately, how and where to buy ALGO safely with low fees.
Is Algorand a Good Investment? Our Summary
Algorand is making a big effort to develop new projects that will expand the possible use cases of 
cryptocurrency. The key driver of this innovation is by making transaction speeds extremely fast and making it faster to deem a transaction as being final. Whilst relatively new and untested in the real world, this could potentially be a competitor to the likes of Visa and MasterCard.
Algorand has a lot of things going for it, which could bode well in both its future price and the likelihood of mass adoption. Beyond just the fast transactions and low fees, Algorand is an interoperable blockchain with a growing ecosystem. It’s listed on many great exchanges in which users are able to gain governance, as well as being a crypto that is easy to use. It also has a rapidly growing NFT market, which alone could be enough to sway many people to invest in Algorand. All of these promising attributes have led to some handsome price forecasts from expert analysts.
Whilst the crypto market at large – along with crypto sentiment – is a large factor in most coins’ success, ALGO only has a 0.2 correlation with Bitcoin over the past 3 months (a very weak correlation, compared to 0.91 for ETH-BTC). This shows that Algorand could possibly hold its own during a Bitcoin crash, and may even be a useful tool of diversification within your portfolio.
How Algorand Has Performed Since Launch & in 2022
ALGO got off to a bad start. In July 2019, ALGO was the worst-performing token on the Binance platform. Its monthly return was -61.8%, meaning it had fallen off a cliff just after its release despite having the backing of VC Union Square Ventures and a lot of pre-sale hype. However, it was argued that the valuation was too high for the retail market at that moment in time.
Since then, ALGO has earned the respect of many crypto-enthusiasts who are ardent on its efficiency and technological prospects. And, whilst it has recently been free from its price being dictated by the price of Bitcoin, like many altcoins are, it still fell victim to the late-2021 crypto bubble bursting.
2021 was perhaps its best year, though. Not just because of its 300%+ returns, but because it was when people became more aware of the project. Its Google searches were at an ATH and it began gaining more news coverage – most of which was very positive.
Investment in Algorand in 2022 has been lacklustre if you were to view it in isolation. However, the whole crypto market was pumped up at the end of 2021 across the board – and that bubble burst a bit. Its YTD performance in 2022 is lagging behind Bitcoin and Ethereum’s, with it being more akin to Cardano and Compound Coin’s YTD decline. So, is Algorand a smart investment? It could be a gamble in the short term.
Algorand Price
Besides the unfortunate launch, from October 2019 to December 2020 ALGO saw very consistent and stable prices despite two bull-bear cycles. However, at the turn of 2021, the price soared from around $0.4 to over $1.7 in around 6 weeks. The coin would then go on to hit over $2.3 in September 2021 – but still is yet to exceed its all-time high, which was its release day price of $3.56.
ALGO is in a tricky place right now, much like a lot of the crypto market. Down from $1.70 at the start of the year to $0.7, yet there is still some sentiment of opportunity.
Update – see our more recent Algorand price prediction.
Algorand highs and lows
- All-Time High is $3.56
- All-Time Low is $0.105336
- 30-day return is 6.3%
- Year-to-date return is -55%
Algorand Price Prediction
To know whether Aglorand is a smart investment, it’s important to look at some charts. The negative returns from Algorand since both launch and the beginning of the year may paint a worse picture than what really happened, though. The initial valuation was mistakenly too high, whilst most of the altcoin market has been struggling in 2022 due to high-risk assets being out of favour – from tech stocks to crypto.
Various crypto forecasts are expecting Algorand to cruise at a stable price with potentially some gains towards the end of the year, but it’s not that simple. ALGO is currently priced at around the support level created in July 2021, though technically it has broken below. Few analysts are expecting it to fall back down to pre-2021 prices, with another bull run being more likely, but it appears high risk to invest in Aglorand at this very moment.
Algorand Utility – is it Investable?
It’s important that we look beyond just the technical analysis and past crypto bubble cycles when evaluating the future investability of Algorand. For Algorand to succeed, it must have real-world use cases. Fortunately, this is Algorand’s priority, which is highlighted in their white papers and investment in facilitating lightning-fast transactions.
Algorand highlight the many use cases and ecosystem members on its website, from entertainment and gaming to financial institutions and insurance. Algorand calls itself “the future of finance”, so we know where its focus is. A grand example of this was El Salvador’s adoption of Bitcoin as legal tender, which was using Algorand’s infrastructure, proving its scalability – though some of the specific details around this collaboration are still vague.
Algorand investment used to be possible to earn passive money. At one point, over 7.5% was up for grabs for simply holding and staking ALGO. However, this was taken away in 2022, and now holding ALGO simply includes you within its community governance. With four quarterly governance periods per year, it’s apparent that this move signals that ALGO is more interested in having a community that’s holding because of its long-term utility, not short-term speculation.
Algorand’s Layer-1 is for transactions and smart contracts that revolve around sales, securitized loans, and accredited-only transactions, among others. They claim that payment processing is only a small fraction of their use cases, with supply chain, real estate, health care, governance, digital voting, and immutable backup being some others.
Given that environmental concerns are only going to grow in society, Algorand being proof-of-stake is vital in keeping down the cost and energy of participating in the blockchain. Algorand’s strong DeFi infrastructure will likely be a hit in emerging markets before it makes an impact in first world countries
Algorand investment and the utility it’s offering undoubtedly face stiff competition, but it’s also ahead of many other coins in its technology. This bodes well for its long-term investability, but technology isn’t the only factor in determining its future success…
Should I Buy Algorand?
So, you’re still wondering, is Algorand a good investment? The truth is that it’s impossible to know for sure, but there are some strong arguments to be made that it is an undervalued cryptocurrency.
Whilst most coins are dependent on the crypto market trends in general, the good news is that ALGO has not been correlated to the Bitcoin price movements in the past 3 months. Whilst you can never avoid systemic risk when holding just crypto, this is as close as you can currently get through crypto diversification.
Furthermore, it shows that it has the potential to rise and that people are becoming increasingly aware of ALGO. Given the expectations that most top 30 coins will break their ATHs in the future, along with the fact that ALGO hasn’t been consistently below $0.7 in over a year, there’s a strong argument that we are at the bottom of the dip. Having said that, it has technically broken the support line from June last year, so the next few months could be pivotal.
Ultimately, the future long-term success of ALGO will heavily depend on its technology and utility, and in this respect, there’s also optimism surrounding its growing influence within DeFi and NFTs. So if you’re looking to invest in NFTs, Algorand might be a smart investment moving forward.
Conclusion
In conclusion, this article has covered both the USP of Algorand, its context within the crypto market, and answered “is Algorand a good investment?”. Things are looking promising, but it’s still very early days, and whilst it is touted as underpinning the Bitcoin monetary system of El Salvador, the details are murky and we cannot put too much stock into this project.
Algorand could be one for the future and certainly worth keeping an eye on, but we would recommend looking at more immediate forms of real-world utility, that are already proven. For example, Lucky Block is a crypto that has an innovative, concrete solution to lottery systems.
Draws occur every day with various winning pools. Its simplicity, efficiency, and increasing hype could see it really challenge the macro lottery market. For this reason, we expect more interest to pick up in the Lucky Block native token, LBLOCK. Plus, LBLOCK holders can receive rewards just for holding this token, making it a passive income stream as much as it is a speculative investment.
Cryptoassets are a highly volatile unregulated investment product.