Celo may not be among the most popular cryptocurrencies out there, but it is certainly one of the coins many people are considering. The coin has caught the attention of many cryptocurrency investors in recent times, and it is always good to investigate a coin properly before investing. So is Celo a good investment?
If you know how the cryptocurrency market works, you will know that there is no "Yes or No" answer to the question we intend to answer here. It is difficult to conclude that a crypto coin is either a good investment or a bad one. The right thing to do is to study a coin properly and decide whether it is a good fit for your portfolio. Your understanding of a coin will also help you devise the best strategy to use when investing in it.
Coming back to Celo, how can you tell whether it can be a good investment? You will need to get the right information about the network and its native currencies. You will also need to consider how well the primary investment vehicle (native token) has performed on the market, as well as projections for the future. In all, finding the right answers to the right questions will help you make the right decisions, and we are going to help you do just that right away.
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What Is Celo?
Celo is a blockchain project that is focused on promoting the adoption of cryptocurrencies by making financial tools and DeFi services available to smartphone users, including the unbanked. According to its official website, Celo is a mobile-first platform that makes financial dApps and crypto payments accessible to anyone with a mobile phone.
As a modern and innovative project, Celo eliminates one of the technical barriers to cryptocurrency adoption – public keys. Public keys are basically long scrambled strings of characters used to identify cryptocurrency accounts. Though they are very relevant in securing accounts of cryptocurrency holders, they can be confusing to newbies. Celo replaces public keys with phone numbers, paving the way for every mobile phone user to start using cryptocurrencies.
In addition to promoting the adoption of cryptocurrencies, Celo serves as a smart contracts platform. It allows developers to create and deploy smart contracts and decentralized applications. It is an integral part of the growing DeFi subsector but remains a unique platform. Celo is fast becoming a large blockchain ecosystem with more than 1000 projects, partners, and developers. It is also supported by millions of crypto traders and investors who hold the native currencies.
As alluded to in the last sentence of the last paragraph, Celo supports more than one digital currency. The native currency of the platform is named Celo Gold (cGLD), but trades under the ticker symbol CELO. The other tokens in the platform are stablecoins. At the moment, there are two functional stablecoins in the platform, Celo Dollars (cUSD), pegged against the US Dollar and Celo Euro (cEUR), pegged against the Euro. Other stablecoins pegged to other global assets will be added to the platform as the needs arise.
Check Out: What Is Celo? Should You Invest In CELO And Where To Buy It?
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
How Does Celo Work?
We’ve already mentioned that Celo swaps public keys for the cellphone number of users, making it straightforward for them to start using cryptocurrencies and enjoying some of the benefits of blockchain technology. That is how it eliminates one of the technical barriers in cryptocurrency adoption. However, that is not the only purpose of the platform. Its mission is to build a financial system that creates the condition for prosperity for everyone. It works in different ways to achieve this.
As a smart contracts platform, Celo makes building decentralized applications (DApps) easy for developers. As an open-source platform, it has the necessary infrastructure for the creation of smart contracts and DApps. The Dapps and assets built on Celo can be moved across chains, carriers, and countries. The platform is EVM-compatible, which means Ethereum developers will find it easy to build with it. Already, there are several successful projects built on Celo.
As mentioned earlier, Celo currently has a native currency called Celo Gold and a couple of stablecoins, Celo Dollar and Celo Euro. Celo Gold is the most important asset in the platform. It is the core utility, reserve, staking, and governance asset on the platform. It is also the primary investment vehicle in the ecosystem. It is used to settle all transaction fees on the network.
CELO serves as the key to network participation and the rewards that comes with it. As a Proof-of-Stake token, it helps to secure the network. Users also earn rewards for staking their coins to power and secure the network. As the governance token, it bestowed holders with the voting rights to make important decisions on how the platform is run.
Though the Celo stablecoins are not the primary assets in the network, they are also important. Since they are pegged to fiat currencies, they help to bring stability to the network. They can also be used by traders/investors as hedges against market volatility.
How Do You Invest In Celo?
For the average cryptocurrency trader or investor, investing in Celo means buying the tokens. As mentioned earlier, Celo Gold (CELO) is the primary asset, though the stablecoins are also important. For the sake of clarity, we will focus on Celo Gold, so investing in Celo means trading CELO.
On the surface level, trading CELO is not a big deal. There are several places where you can buy and sell the coin. The major challenge is knowing how to trade profitably, and that is where experience counts. Depending on your experience level, you may choose day-trading as a strategy to invest in Celo. Another person may choose HODLing. You just need to understand your strategy and trade cautiously.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
How Do You Make Money From Celo?
In the two paragraphs above, we stated clearly that to invest in Celo, you need to trade the coin. Trading basically means buying and selling the coin. However, that is not the only way to make money from Celo. Even for the regular investor, there are different ways to make money from Celo and we will discuss the options right away.
1. Trading
Trading is the commonest way to make money from Celo and several other cryptocurrencies. In simple terms, it involves buying and selling the token for profits. You will make a profit when you buy cheap and sell when the price is higher. There are two basic approaches to this (Day-trading and HODLing).
Day-trading means buying and selling an asset at different times within the same trading day. In a volatile market like the cryptocurrency market, this requires being active always and monitoring the market at all times. Celo is volatile, which means it is risky to trade. At the same time, it can be rewarding if you trade cautiously.
HODLing is an investment strategy for long-term investors. It requires patience and risk tolerance. In simple words, HODLing means buying an asset and holding it for future profits and not selling. To HODLe Celo, you must be ready to buy the coin and keep it safe in your digital wallet for months or even years. Considering its volatile nature and its rate of growth, CELO is not looking like a good coin to HODLe.
2. Staking
Staking is the commonest way to earn passive income by investing in cryptocurrencies. It simply means locking your crypto holding for a specific period to earn returns. You can stake your Celo tokens through Celo Wallet, Celo Vote, Celo Dance, or Celo Terminal. You will earn your rewards for staking in CELO too, and the price at the time of selling will determine whether you will get a profit or a loss.
3. Lending
Celo also allows for lending and borrowing of digital assets. You can earn returns when you make your Celo tokens available for borrowers. Moola is an example of a successful project on Celo and it is a non-custodial liquidity protocol that allows lenders to deposit Celo tokens and earn passive yield paid by borrowers.
4. Farming
Celo can also be used for yield farming. In simple terms, this means providing liquidity for liquidity pools that make crypto pairs available for swapping or what we can also call trading. Many liquidity platforms like SushiSwap and Ubeswap offer farming functionalities on Celo.
Is Celo A Good Investment?
It is difficult to assert that Celo is a good investment, just as it is difficult to dismiss it as a potentially bad investment. The platform's goals and mission are commendable. Considering that the number of smartphone users is growing at a higher pace than the rate of cryptocurrency adoption, the project looks like something that will make a lot of impact on the industry. Again, it is a smart contracts platform and a part of the fast-growing DeFi subsector. However, these qualities do not mean CELO will yield profits for traders and investors.
One of the easiest ways to determine whether Celo is a good investment is to consider its performance so far. Launched through an ICO on 11th May 2020, CELO has not lived up to expectations. The ICO token Price was $1 per token. The value of the coin has grown slowly since the launch. Initially, it dropped to an all-time low of $0.7955 on May 22nd 2020 before recovering to end 2020 at about $1.55. 2021 saw the coin reach an all-time high of $10.66 on 30th August. It dropped sharply afterwards and has been unable to get close to that value in recent time.
At the time of writing this piece, CELO was trading for $3.09 per token, which was its highest price in a 24-hour period with the lowest being $2.93. Its 24-hour trading volume at the time was $48,825,147. CELO ROI at the time, according to Coin Market Cap was 274.58%, which is poor when compared to some top-performing DeFi tokens launched at the same period.
CELO can be a good coin for short-term investment. If you are looking at long-term investment, CELO may not be the best option for you. Celo price predictions from authority websites are not even encouraging.
Does Celo Have A Future?
The primary goal of investing in an asset is to make a profit in the future. What happens when the asset you buy doesn't have a future? It will amount to a waste. It is important, therefore, to be sure that Celo has a future before investing.
Considering what the project stands for, we can say that Celo has a future. It is driving the adoption of cryptocurrencies and at the same time serves as a smart contacts platform for different DeFi services. Celo is playing an important role in DeFi, and the network is bound to experience growth in the future. The only major drawback is the fact that the price of the token may never go up so much. Even some of the most optimistic predictions websites are predicting that CELO will grow slowly.
Don't Miss: Celo Price Predictions
What Are The Good Sides Of Celo Investment?
Sometimes, the easiest way to make up your mind about a potential investment is to compare its good sides and its bad sides. Here are the major good sides of Celo investment:
✅ Investing in Celo means you are helping to push for the adoption of cryptocurrencies across the world and helping even the unbanked population to access the benefits of decentralized finance.
✅ Celo is a smart contracts platform that supports the creation and launching of different digital assets – it will expand in the future and the expansion can have a positive impact on your investment.
✅ Celo is a highly secured platform which also means that your investment will be safe.
✅ Celo supports staking, yield farming, lending and borrowing – which are decent ways to earn passive income from your cryptocurrency investment without selling your holdings.
✅ Celo is backed by several notable investors who believe in the future of the platform – we can assume that these smart individuals have seen that Celo’s future is bright.
✅ The Celo token will give you the right to vote on important governance decisions that will shape the future of the network and, in extension, the potentials of your investment.
✅ Being a Celo investor also means you have easy access to the stablecoins – you can easily fall back to the stablecoins to manage risks when the market becomes too volatile.
✅ CELO is an affordable DeFi token, which means you can start investing with very little capital while enjoying some of the best features DeFi offers.
What Are The Bad Sides Of Celo Investment?
Just as there are so many good sides to Celo investment, there are also bad sides to it. It is only fair that we also discuss these bad sides to give you a balanced view:
❌ Celo is a relatively new project and new tokens are generally considered to be riskier since no one can see into the future to determine whether they will gain more value or become less valuable with time.
❌ CELO is an extremely volatile asset, which means it is a risky investment that can result in a significant loss.
❌ Since it was launched, CELO’s liquidity has remained very low and this is a big issue for every investor.
❌ Celo faces competition from several other cryptocurrency platforms. Due to its functionalities, it will compete with some of the best smart contracts platforms as well as stablecoin platforms in the DeFi space.
❌ CELO has been disappointing when compared to most DeFi projects launched in 2020. Though the ecosystem is expanding, the value of the token has remained low.
Should You Invest In Celo?
We've discussed most of the things you need to know about Celo to decide whether it is a good investment or it. To be honest, it is a matter of choice and experience. Some experienced traders can invest in Celo and make a reasonable profit within a short period because of its volatile nature. The same volatility issue can make an inexperienced trader lose a lot of money by venturing into Celo investing.
It is important to understand the risks involved in Celo investment and devise a means to minimize them. As hinted earlier, day-trading looks like the best strategy for CELO. Since the coin is unlikely to gain so much value in the future, HODLing is not advisable. If you must HODLe, then you should explore the different ways of earning passive income with Celo. It is possible that CELO will become very valuable in the future (the chances are actually slim). If this happens, then you will thank your stars for having the courage to HODLe the unpromising digital coin.
Read Also: Could Celo Be A Millionaire-Maker Coin?
The Best Way To Invest In Celo?
At this point, you must have made up your mind to either invest in Celo or ignore it. If you want to invest, it is important that you do it the smart way. Already, we have stressed the importance of choosing the right investment strategy. Considering the volatile nature of the coin, you should also be ready to monitor the market to know when to make a move.
We cannot overemphasise the importance of choosing a reliable platform to buy a digital currency. You should know better than attempt to buy CELO from any regular platform. Thankfully, the coin is now available on eToro, the leading social trading platform. eToro offers so many perks that you can’t find anywhere else, and trading with it can be beneficial in many ways.
eToro — The Top Platform To Buy Celo
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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