Is It Worth Investing In Cosmos?

Last Updated January 25th 2022

15 Min Read

Imagine if computers around the world couldn't communicate with each other. Well, we wouldn't have the internet.

Now, while different blockchain networks are useful and powerful on their own, they rarely communicate with each other. This limits their power. It's like if your computer could only contact computers on the same brand and operating system.

So what does blockchain interoperability mean? How is it relevant to the whole concept of decentralization?

Let's say you have some money in a bank account or locked up in cryptocurrencies. You might want to use that money to invest in something else, maybe stocks or real estate. But those assets are stored in a different kind of database across a totally separate blockchain.

Interoperability is the bridge that lets you use the same money stored in a bank account to buy stocks and vice-versa.

So why don't all blockchains work together?

There's actually no technical reason they can't talk to each other. In fact, anyone who knows JavaScript can code an application to transfer money from one blockchain to another in a few minutes.

However, right now, the only way to use your blockchain assets to buy stocks is by going through an exchange that supports both blockchains. You have to trade your cryptocurrencies for a common cryptocurrency of the exchange and then trade that for the stock of your choice.

Currently, you're limited to exchange pairs with relatively high liquidity (transaction volume), like BTC/ETH or BTC/XLM.

What if there was a platform that could access any blockchain asset you own through the same digital wallet, selling it in seconds on secondary markets? You'd be able to decide whether to keep, trade or use your assets however you please — no more waiting days for exchanges to add your favourite coins.

That's the promise of blockchain interoperability.

And that's where Cosmos comes in.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Contents

What Is Cosmos?
How Does Cosmos Work?
Cosmos (ATOM) Price History
Cosmos (ATOM) Price Prediction For 2022 And 2023
How To Invest In Cosmos
Is Cosmos (ATOM) A Good Investment?
Conclusion: So, Should I Buy ATOM Tokens?

What Is Cosmos?

Cosmos is a protocol that lets blockchains communicate with each other. It's designed to be more flexible than other interoperability solutions, letting developers build their own applications on top of it.

To do this, Cosmos uses a unique incentive system to promote cross-chain communication. It creates a network of "zones", each operating as an independent blockchain responsible for managing its own security via staking. The zones can all choose which other zones they want to connect with, and if a zone gets hacked, it's only the coins on that particular chain that are compromised, so users don't need to worry about their other assets.

On the Cosmos blockchain, coins are used as a way of staking for security. Staking ATOM tokens allows you to vote on block producers and prevent collusion among malicious actors.

Why is interoperability necessary?

Right now, each blockchain operates in isolation with little to no cross-chain communication. It's like if you had an email address but couldn't reply to or forward messages from any other servers, let alone check your work email on the weekend.

However, this is changing quickly as blockchain technology matures, and there are many blockchains in existence, with more being created every day!

Eventually, all these blockchain networks will need to communicate if they want to work together. Otherwise, there will just be chaos.

Blockchain interoperability is necessary to create a global network of chains that can transact with each other without intermediaries. This has the potential to disrupt big industries like banking by giving people easier access to their funds.

How Does Cosmos Work?

To understand the concept of blockchain interoperability, let's take a look at how Cosmos actually works.

The Cosmos network has a few different components:

Cosmos Hub: The main blockchain, called the "Hub", acts as a sort of router for transactions from other blockchains to be sent through Tendermint consensus. All zones start with an IBC (Inter-Blockchain Communication) address on the Hub and gain access to all of its services by staking tokens.
Cosmos Zones: These are independent blockchains that can connect to the Cosmos Hub. Each zone is controlled by a group of validators who work together to reach a consensus about new blocks.
Inter-Blockchain Communication Protocol: IBC is the protocol that connects Cosmos Hub and each of the zones. It's like TCP/IP for blockchain, allowing data to be transmitted between any two communicating nodes. It's important to note that all applications built on top of Cosmos must use IBC.
Tendermint Byzantine Fault Tolerance (BFT): This is the consensus algorithm that validators use for reaching an agreement about block creation and distribution.
Cosmos SDK: The Cosmos SDK is a set of APIs and libraries that developers can use to make apps with the Cosmos blockchain.
ATOM Tokens: ATOM is used for staking security (voting for validators), governance (voting on development proposals) and economic incentives. They are the fuel of Cosmos, powering every component of the network.

Check Out: Is Cosmos (ATOM) Safe?

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Cosmos (ATOM) Price History

The price of Cosmos has been very volatile over the last few months, but it's starting to climb as awareness and development around this project increases.

At the time of writing, it's sitting just over $36 per token with a circulating supply of around 286 million.

Cosmos’ origins can be traced back to 2014, although according to CoinMarketCap, it might have started trading actively around 2019. The Whitepaper was published in 2016, and a token sale followed in 2017, where Cosmos raised about $17 million.

According to historical data, ATOM’s earliest known price is $7.5 in mid-March 2019. Obviously, the coin has grown quite a bit which means there is some potential in its future.

For instance, people who bought it at this price can make a good profit if they sell now. This is why we believe a long-term investment strategy is the best route for ATOM.

Anyway, ATOM remained low from March 2019 until mid-January 2021. During this time, it mostly traded below $8 except in late August when it went to as high as $8.5.

Shortly after mid-January 2021, ATOM crossed $9, and it prepared for one of its biggest growth.

The first of this growth happened between January 27th 2021, and February 16th 2021, when ATOM rose from a humbling low of $6.988 to as high as $25.19. This represented a more than 260% gain in less than a month.

From there, ATOM faced a marginal correction, and there were some fluctuations in between before it crossed $27.97 in mid-April. It then dropped to as low as $18 then rose again to hit $30 for the first time on March 8th, 2021.

This jump was followed by a devastating slump that saw ATOM bottoming out at $12.24 on March 22nd, 2021. This kind of crash would have naturally brought a lot of pessimism among investors. And it did.

Most began selling their stash, and by mid-June, the price had gone down to $8.97. Most price analysts predicted that the value would go down further, but Cosmos had other plans.

The coin rose from as low as $9.96 on July 19th, 2021, to reach its current all-time high price of $44.54 on September 20, 2021. This means that ATOM grew by a whopping 347.2% within two months.

This was obviously impressive growth. And while most investors decided to sell their coins and reap a profit, others decided to hold on in the hopes that the price would grow further. As a result, there was a tolerable drop, and the next day, ATOM’s price went down to $30.44.

About two days later, it was up to $42.79 and then then it dropped again slightly. On October 26, ATOM almost went back to its ATH after reaching $43.22. However, it began dropping and has since lost more than 37% of its peak value.

At the time of writing, ATOM was trading at $36.31 with a market cap of around $10.3 billion. This makes it the 17th biggest cryptocurrency by market capitalization.

Cosmos (ATOM) Price Prediction For 2022 And 2023

The long-term potential for this project is immense. It has a lot of room to grow in the coming years, and once interoperability becomes widely adopted, ATOM may be worth 10x what it is today. If the market cap reaches $10 billion, each ATOM could easily be worth over $50, which may seem like a stretch for some investors.

However, if blockchain technology takes off in the enterprise world while maintaining its dominance in the consumer space, this project will become incredibly valuable.

In fact, according to Wallet Investor, this projection is possible this year. The AI-based price prediction platform projects that Cosmos ATOM could be worth around $59.93 by the end of 2022.

The Cosmos coin will kick off 2022 at around $38.37 then steadily grow to close the year at almost $60 per token. Of course, there might be some fluctuations in between, but Wallet Investor predicts that the growth trajectory will mostly be linear.

Coin Price Forecast agrees with Wallet Investor and predicts that Cosmos ATOM will close 2022 at around $72.62.

Gov.capital seems to be the most optimistic and predicts that Cosmos ATOM will be worth close to $76.70 by the end of 2022. This is a fairly bullish prediction, especially when compared to Long Forecast’s prediction of $35.19 by the end of December 2022.

Most of these price analysts are just as optimistic about the future of ATOM in 2023. For instance, Wallet Investor predictions that the Cosmos coin will start the year at around $59.96 and then close at $87.08. On the other hand, Long Forecast is much less optimistic and predicts that ATOM will be worth $40.82 and $67.96 by the start and end of 2023, respectively.

Long Forecast predicts that the coin will start the year smoothly and go as high as $70.31 in July before rising again. This is fairly low compared to Coin Price Forecast’s prediction of $94.41 in mid-2023 and $85.20 by the end of the year.

Gov.capital is still very bullish and predicts that Cosmos will start off 2023 at $78.75 and close at as high as $138.33.

As you can see, there is plenty of optimism surrounding the future of Cosmos. From these predictions, we can wager that the coin will easily surpass the $100 per coin point in the next two years. This will take its market cap to as high as $30 billion, making it one of the most valuable cryptocurrencies.

Don't Miss: Cosmos Price Prediction

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

How To Invest In Cosmos

If you believe Cosmos will make a good addition to your investment portfolio, there are several ways you can invest in it.

The three of the most common are:

HODLing
Trading
Staking

Method 1: HODLing

HODLing is just a term that means "Holding" your tokens for the long term. The idea is to wait until the value of ATOM tokens appreciate, and you can sell at a higher price than what you bought for.

This is the best strategy for people who are looking to invest in Cosmos for the long term. Many people hold their cryptocurrencies for weeks, quarters and even years before they decide to cash out.

In order to HODL ATOM, you will need to store them in an off-exchange wallet. This is because the default exchange wallets are vulnerable to hacking, and you might lose all your investment to hackers.

There are several ways you can store ATOM tokens safely without having to worry about them being hacked or stolen. These include using:

Hardware wallets like Ledger Nano S
Desktop wallets like Atomic Wallet and iBitNow
Web-based wallets like HolyTransaction
ERC-20 compatible wallets like MyEtherWallet

Each type of wallet has there own pros and cons. For instance, hardware wallets are the most secure option, but they tend to be more expensive and not convenient to use. On the other hand, web-based wallets are the cheapest and most convenient to use, but they are vulnerable to hacks.

Though it is always advisable not to put your eggs in one basket, holding all your ATOM tokens at once might make you vulnerable to losing even more if something bad were to happen (and unfortunately, bad things do happen)

Hence, it is important to keep your ATOM tokens in different places so that if there were a hack or you lost access to one particular type of wallet, you wouldn't lose all your investment.

HODLing is for people who want to buy and forget about their ATOM tokens for a long time. However, if you want to get your hands dirty and be more involved in the investment process, we recommend trading ATOM tokens.

Method 2: Trading

Trading is the act of buying low and selling high. This option allows you to make money off price fluctuations in both directions, but because the market is so volatile, there's always a risk that your investment will go to zero if things don't pan out.

The most important thing to remember with trading is that you want to minimize your risk. This can be done by setting stop-loss orders and having a well-balanced portfolio.

Trading is generally risky, and we only recommend it to people who have a lot of experience in the space, with things like technical analysis and market research.

There are several exchanges that you can use to buy and sell ATOM tokens. Some of the most popular ones include:

Binance
eToro
Uphold
BitPanda
Kraken
Gate.io

For the best trading experience, however, we recommend using eToro. The reason behind this is that eToro is the easiest way to get started with trading cryptocurrencies. It has very low fees, offers a variety of coins, and you can start trading ATOM tokens within minutes.

It also has a range of important trading tools, such as a Stop-loss feature, which help you manage your risks better.

To start trading ATOM on eToro:

Visit www.etoro.com and create an account or log in
Deposit a minimum of $200 into your new account
Navigate to 'Top Markets' then choose 'Cryptocurrencies"
Scroll down the list of cryptocurrencies to find Cosmos (ATOM) or simply use the search bar on top to find it.
Click on 'Trade'
Enter the amount you want to use to buy ATOM
Click on "Open Trade'

That's it! You can now start trading ATOM on eToro. If you want to, you can set such parameters as Stop Loss and Take Profit in order to minimize your risk.

Method 3: Staking

Staking is similar to HODLing, but instead of simply holding your cryptocurrencies, you can earn a small amount of interest on them.

This is a good option for investors who want to use their coins as a staking mechanism to earn a passive income. This is because Cosmos ATOMs give you access to the network's governance and consensus, which means that if your coins are used to vote for validators, you will be rewarded with additional tokens over time.

If you stake your coins long enough, you could earn a return that's big enough to outperform even the more established cryptocurrencies.

However, staking is only available through the native wallet and will require users to leave their computer turned on 24/7 while connected to the Internet for maximum yield. This may be a deal-breaker for many, and we recommend using other options if you want to earn passive income.

There is also a security risk, as your computer needs to be online and running the wallet all the time in order not to miss out on any staking rewards. If you think this sounds like too much work (or too much risk), you should consider the other options.

In the case of Cosmos Hub, you start earning rewards as soon you start staking. In order to claim your rewards, you can send a transaction using a supported wallet.

According to the Cosmos website, you will be rewarded a 9.7% APY on your staked ATOM tokens. For instance, if you stake 1,000 ATOM, you will be rewarded around 89.18 ATOM on a 10.28% commission. The commission will, however, vary between different validators.

The rewards you receive when you stake ATOM are generated in two ways:

Transaction fees
Newly created ATOM tokens

Is Cosmos (ATOM) A Good Investment?

Cosmos may not be a good investment vehicle if you're looking for short-term gains. In this bear market, it's hard to make decent profits from ATOM tokens or any other cryptocurrencies, but if you invest in ways that will help the platform grow and develop, your investment could pay off handsomely in the long run.

This is because Cosmos is a project that's focused on growing its ecosystem over the years rather than making massive profits through hype and speculations.

The main goal of this cryptocurrency is to connect blockchain networks with each other and provide better interoperability between blockchains. This means that your ATOM tokens could gain value if more blockchains start using their services.

As this platform matures, there is the added benefit of ATOM tokens' value increases as well because if more blockchains start using Cosmos, you will need to use ATOM tokens to interact with the Cosmos hub.

If this happens, values will shoot up to record levels and make early investors even wealthier in the future. A lot of potential future value is locked up in this cryptocurrency since the more blockchains that use the Cosmos hub, the higher demand for ATOM tokens will be.

There are also plans to increase supply through staking rewards and operational fees over time, so overall values should only rise as long as investors believe in this platform's potential.

Conclusion: So, Should I Buy ATOM Tokens?

Cosmos isn't one of the most popular cryptocurrencies on the market right now, which means it's usually not possible to invest in it unless you are willing to take a significant amount of risk.

It may also be more difficult for you to find ATOM tokens if there are no sellers who offer them at the price you're looking for. However, if you're looking for a long-term investment that has the potential to pay off in the future, Cosmos may be worth buying into.

While it's too early to say whether this cryptocurrency will continue to rise in value over time, what you can do is invest in ATOMs and hope for them to increase in value together with the platform

This may be a good investment, but only time will tell if Cosmos ATOMs will live up to investors' expectations as one of the most profitable projects in the industry today.