Algorand (CCC:ALGO-USD) is seen on popular social media sites as the next Solana (CCC:SOL-USD). This is due both to its popular appeal as well as the price gains that ALGO crypto has made in the past several months.
For example, at the end of last year, Algorand tokens were at 33 cents. On Nov. 26, they were up significantly at $1.59. That puts it at 4.8 times the price it was at on Dec. 31. This represents a 380% gain for ALGO crypto through Thanksgiving — and it’s added more since.
Moreover, Algorand reached a peak of $2.83, putting it at 8.6 times the price it started the year. Since then, however, ALGO crypto has drifted lower and is currently trading at $1.80.
Algorand’s Stand Out Features
Algorand calls itself “the future of finance” on its website. It believes it will power the “convergence” between traditional finance and decentralized finance (DeFi). Many DeFi apps today provide the functions that banks do, such as lending and borrowing currency. They do this through the use of smart contracts and blockchain software.
Algorand recently announced the launch of the Algorand Virtual Machine, or AVM, a layer-1 protocol, according to Cointelegraph magazine. This will allow the Algorand blockchain to be useful to developers and organizations to develop DeFi smart contracts.
However, it may still take some time for Algorand to reach its goal as the “future of finance” as its website says. The adoption rate by developers using Algorand as the blockchain of choice for their smart contracts could take a good while.
Recently, one company made a breakthrough in this arena with Algorand. A blockchain and cryptocurrency company called Glitter Finance decided to integrate the Algorand DeFi ecosystem with Solana. This could have contributed to the social media pronouncements that Algorand may be the next Solana.
Glitter Finance will integrate Algorand blockchain elements with Solana in order to enable owners of cryptos to anonymously move their assets. This will allow them to move their cryptos from one blockchain to another using Algorand.
However, the biggest recent news for Algorand is the adoption of cryptocurrency as legal tender in El Salvador. El Salvador recently recognized Bitcoin (CCC:BTC-USD) as a valid form of payment. Moreover, Algorand was selected as the official blockchain platform for the project.
El Salvador will develop its own blockchain infrastructure using Algorand to help build out the infrastructure. This is significant as a “real-world adoption.”
Analysts see this as an example of a large-scale adoption that other governments and institutions may keep an eye on. They will watch to see how this develops in El Salvador in order to gauge whether it could be adopted on a larger scale in another country.
Where This Leaves Investors in ALGO Crypto
Investors in Algorand have two things on their side. For one, ALGO crypto is well off of its former highs. This allows an investor to get in at a bargain price. Secondly, investors now have the benefit of seeing Algorand put to the test on a large scale in a small nation. For all intents and purposes, it will act as a test tube.
If successful, this could be seen as a precursor for large-scale adoption of Algorand by a number of companies or even countries. If Algorand’s infrastructure blockchain is a success for El Salvador, follow-on major adoption will occur in the U.S. Investors in ALGO crypto can expect to see a huge increase if that happens. It could indeed become the next Solana.
On the date of publication, Mark R. Hake did not own any security mentioned in the article, directly or indirectly. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.