Analysts at Weiss Ratings believe SNX, the native token for the decentralized exchange Synthetix, will triple in value by year’s end.
Built on the Ethereum blockchain, Synthetix allows users to bet on stocks, crypto, fiat currencies, and commodities via synthetic assets that are collateralized by SNX. SNX tokens have shot up 64.6% in the past 30 days and 1,961% in the past year, according to CoinGecko. They’re trading at $6.37 at time of writing.
Weiss analysts also note that they believe SNX still has a lot of room to grow. Despite the explosion of decentralized finance (DeFi) platforms like Synthetix over the past month, they still represent less than one-tenth the size of all smart-contract platforms, which are worth $45.7 billion overall.
Weiss also argues that the token’s staking rewards will drive up the value.
“0.3% of every trade taking place on Synthetix goes into a sUSD fee pool, which is distributed to SNX coin holders in proportion to the size of their stakes…. On top of that, staked coins are also eligible to receive block rewards. These are additional SNX created from time to time during Synthetix’s first six years of operation to increase overall liquidity.”
Because of those rewards, 70-80% of SNX tokens are staked, which removes them from the circulating supply.
The analysts also point out that there is probably a 1-10 ratio in the total value of equities trading around the world compared to the value of the derivatives trading on top of them, a stat they say is indicative of the potential value of a platform like Synthetix.
“Buying SNX is like buying stock in a highly-liquid crypto exchange with derivatives trading… binary options started trading on July 1… Within a week, SNX jumped from $1.90 to $2.60. And now, just 44 days later, SNX is $5 coin and climbing.
This is just a taste of the gains that are likely in store as Synthetix launches crypto futures and leveraged trading – sometime between now and year end.”
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Vladi333
