Leading hybrid payment system provider Alchemy Pay (ACH-USD) offers an exciting platform in the nascent crypto space. Yet, ACH-USD has lately been struggling to gain traction, down about 37% year-to-date (YTD).
By comparison, since January the two largest digital currencies, Bitcoin (BTC-USD) and Ethereum (ETH-USD) are down 14% and 23%, respectively. Meanwhile, the S&P 500 and the Nasdaq have lost roughly 6.8% and 13.9%. Put another way, so far in 2022, holders of Alchemy Pay have seen larger losses than other widely-followed assets.
ACH is currently changing hands around four cents per token, up 2,600% from its July 21 lows but down roughly 80% from its Aug. 6 all-time-high (ATH) of 19.9 cents. According to CoinMarketCap.com, Alchemy Pay currently ranks among the top 280 cryptos, with a market capitalization (cap) of around $169 million.
Recent metrics from Crypto.com Market Sizing shows that the number of crypto users is expected to “reach 1 billion by the end of 2022.” Meanwhile, at least 18% of the U.S. adult population tends to use cryptocurrencies to buy goods, according to a survey of PYMNTS and BitPay.
Investors now wonder whether cryptocurrency payments and, thus, ACH can see more adoption amidst the increasing interest in the crypto market. Given the recent declines we have seen in digital assets and broader markets, we could see a rebound in prices soon.
However, in the short-run, Alchemy Pay will likely stay volatile. Therefore, you should consider buying ACH-USD only if you are a long-term investor whose portfolio can handle choppiness. Let’s see why.
ACH: A Bridge Between Cryptos and Fiat Markets
Created in 2018 by a team of professionals from financial technology (fintech) and traditional finance industries, Alchemy Pay “bridges fiat and crypto global economies through its real-world payment network and mainstream-friendly access to web3 services.”
The protocol is working to enable a seamless acceptance of digital assets in an ecosystem that includes merchants, exchanges, digital wallets, banks and the decentralized finance (DeFi) infrastructure. Alchemy Pay bulls point out that the network offers several advantages, including relatively low processing fees and mitigated price volatility as the crypto is directly converted into fiat currency at the point of sale (POS).
It is available in over 70 countries, and has over 300 fiat and crypto payment channels. Crypto industry heavyweights, such as Binance (BNB-USD), Shopify (NYSE:SHOP), QFPay and Arcadier, are among those names. They collectively represent more than 2 million touchpoints worldwide.
ACH is the platform’s native ERC-20 utility token, which runs on the Ethereum blockchain. It has a maximum supply of 10 billion coins, with roughly 4.2 billion currently in circulation.
Since its debut in 2020, this crypto-fiat payment platform has integrated a number of major cryptocurrencies, such as Avalanche (AVAX-USD), Polygon (MATIC-USD), Tron (TRX-USD), NEO (NEO-USD) and, more recently, Algorand (ALGO-USD).
It has also established the Blockchain Infrastructure Alliance (BIA) together with other major players in the blockchain world. In late October, the alliance launched “limited edition NFT crypto-linked virtual cards.”
Earlier in 2022, the network announced collaborations with global payment firm NIUM and Europe-based digital bank Paytend. It also started accepting Dai (DAI-USD), the USD-pegged stablecoin of MakerDAO. Finally, the blockchain network has officially become partners with the Spanish football club Real Betis.
The Bottom Line on Alchemy Pay
As DeFi and digital assets gain traction, cryptocurrencies are also becoming mainstream. However, with over 18,000 cryptocurrencies listed on CoinMarketCap.com, it is not easy for investors to pick out the hidden assets that offer long-term potential.
Alchemy Pay raised $200 million in early February, pushing its valuation to $10.2 billion. The platform’s strong prospects are also boosted by increased partnerships and utility areas. The enhanced adoption in business-to-business and customer-to-business hybrid payments could drive ACH token to new highs.
However, the world’s first hybrid crypto-fiat payment gateway is not alone in the blockchain world. It has a few serious competitors, such as Stellar (XLM-USD) and Ripple (XRP-USD), with similar objectives. Therefore, it will not necessarily be smooth sailing for ACH-USD bulls.
In short, Alchemy Pay offers a practical and bold vision to drive broader adoption of blockchain technology. Yet, it needs time to prove its tangible benefits and outshine the rivals in the hybrid payment gateway segment. In the meantime, the ACH token remains a volatile asset.
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.