VeChain (CCC:VET-USD) is rapidly gaining popularity as a supply logistics blockchain solution and a cryptocurrency. Over the last 52 weeks, VET-USD is up around 750%. Its price went from trading around 2 cents at the end of 2020 to a range of 5.99 cents-15.3 cents this month.
With a market capitalization of $5.1 billion, the altcoin currently ranks among the top 25 digital coins. Despite the recent sell-off in cryptos, VET-USD has gained over 300% since the start of the year. By comparison, Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD) have appreciated about 21% and 200% YTD, respectively.
VeChain is an enterprise-level public blockchain network. Its original focus has been anti-counterfeiting. Now, the network aims to make supply chains transparent through smart contracts, and provide users with a steady and dependable flow of information regarding a product’s lifecycle.
Today’s article discusses what to expect from VeChain in the second half of 2021. If you’re an investor with a long-term horizon, you might consider including VET-USD in your portfolio. However, daily volatility is likely to stay here in the coming weeks.
VeChain and Supply Chain Management
Recent research led by Kevin A. Clauson of Lipscomb University, Nashville, Tennessee, highlights what business should expect to gain from blockchain in supply chain management. The key benefit his team identified include: Reducing or eliminating fraud and errors; reducing delays from paperwork; improving inventory management; minimizing courier costs; and, increasing consumer and partner trust.
In other words, businesses that improve their supply chains can gain a competitive advantage in their respective industries. Readers might be interested to know that “When VeChain was first conceived in 2017, it focused on supply chain with the ‘Ve’ being short for verify.”
Chinese Backend-as-a-Service (BaaS) company BitSe developed the platform. Ex-managers from International Business Machines (NYSE:IBM), Alibaba (NYSE:BABA), and LVMH Moet Hennessy Louis Vuitton (OTCMKTS:LVMHF) are among the founders.
VeChain works on a Proof-of-Authority algorithm, offering a higher level of scalability for enterprise solutions. In addition, VeChain uses radio frequency identification (RFID) sensors and tags to ensure the traceability of a product’s entire lifecycle. RFID enables information to be tracked while it is being transferred.
The data collected includes location, shipment movements, stored information, product identification and even temperature. It can be broadcast almost immediately, from a distance and without the need for other technology. As a result, industries such as automobile, healthcare, food, insurance, and logistics can benefit from using the VeChain blockchain technology for better supply chain management.
Dual Crypto Currency
InvestorPlace.com contributor Mark R. Hake, CFA, has written in detail about VeChain’s “unique dual currency and dividend crypto system.” In summary, the network is based on the Ethereum blockchain. Users who want to track their supply chain operations successfully need to own VET-USD.
Holding VET-USD generates the secondary VeThor Token (CCC:VTHO-USD), which “is represented as the energy cost for carrying payment transactions and smart contract transactions.” Put another way, VTHO-USD can then be spent on the platform for making transactions or paying for network services. The altcoin has appreciated almost 1,000% in the past year.
As the number of companies that utilize the VeChain network grows, VET-USD and thus VTHO-USD will gain traction. For instance, Norwegian maritime group DNV has been an early adopter of blockchain logistics and used VeChain.
Other businesses that have partnered with VeChain include Walmart (NYSE:WMT), BMW (OTCMKTS:BMWYY), Warren Buffett-backed BYD (OTCMKTS:BYDDY), People’s Insurance Company of China (NYSE:PICC) as well as PWC, Yida China Holdings, and BitOcean.
The Bottom Line on VET-USD
For the supply chain and logistics industry, blockchain technology is revolutionizing the way it works, creating safer and more efficient solutions than traditional methods.
If VET-USD continues to innovate in this industry and build strategic partnerships, it can continue to stand as the top supply chain and logistics-focused cryptocurrency. It has solid fundamentals as a chain tracking crypto. Because it offers viable solutions to logistics problems, VET-USD has excellent potential in the long run.
Yet, the crypto space has been having its “bubble-pop” moment in recent weeks, and the market is still stabilizing after the recent sell-off. Thus VET-USD could still be at the mercy of the broader digital currency market in the coming weeks. But buy-and-hold investors could regard the recent decline as an opportunity to purchase the altcoin.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil, Ph.D., has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all three levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.