Most crypto analysts and investors believe that Uniswap is cheap because it is a relatively new and untested cryptocurrency. They believe that unlike other more established and well-understood cryptocurrencies like Bitcoin or Ethereum, Uniswap is yet to carve a niche for itself in the crypto market and acquire its share of loyal investors/traders.
Nevertheless, these analysts and investors also agree that pitting the token’s current price of $40 against is network’s innovativeness and popularity, Uniswap is considerably undervalued. They, therefore, conclude that it shouldn’t come as a surprise to the crypto community if UNI, which also ranks highly among the fastest growing digital assets, records astronomical price jumps in the near future.
In this Uniswap price review and prediction guide, we want to answer the question of why UNI tokens are this cheap. We will also look at what the cryptocurrency could be worth and tell you if you should consider investing in Uniswap. First, though, we seek to understand what is Uniswap and how it works.
What is Uniswap?
Uniswap is one of the largest and most popular decentralized exchanges, hosted on the Ethereum blockchain. Its most unique and distinguishing feature is the integration of the highly innovative Automated Market Maker (AMM) protocol in solving liquidity issues on the blockchain.
Unlike conventional exchanges that are centralized and regulated, Uniswap is fully decentralized and community controlled. Additionally, Uniswap presents investors with earning opportunities by allowing them to contribute liquidity to the DEX platform by way of staking tokens and drawing interests in return. Importantly, it makes it possible for virtually any Uniswap DEX client to create and list custom tokens on its decentralized exchange.
The protocol was created by Hayden Adams – an Ethereum blockchain developer – and launched in November 2018. However, it was not until September 2020 that its developers inaugurated a native token. Dubbed UNI, the protocol developers argue that it is intended to facilitate transactions within the exchange. Crypto industry experts are nevertheless convinced that the hasty creation of the coin was also informed by the need to maintain a competitive edge, especially over their fiercest coopetition – Sushiswap – that had just launched its Sushi token.
Other features unique to Uniswap include the fact that its maximum supply is capped at 1 Billion UNI tokens. Further, the lack of a central body ensures that liquidity providers share all the fees earned from block validation and transaction processing. Its growth has also been unprecedented, seeing that less than eight months after its launch, the liquidity-providing token has overtaken most cryptocurrencies (including Litecoin) to become the 11th largest cryptocurrency with a market capitalization of $22.215 Billion.
Why Have Uniswap Prices Dropped?
To a large extent, the Uniswap price drop and the deviation from its continuously up-trending price chart can be attributed to the slowed-down crypto market rally and allegations of fake token volumes on UNIswap DEX.
It must be noted that the 2020 Uniswap token launch coincided with two critical crypto industry events. First, the Crypto market – especially the leading cryptocurrencies – had accumulated enough thrust and were ready for the price jump. Secondly, the popularity of the DeFi ecosystem – in which Uniswap operates – was exploding.
These occurrences, coupled with the fact that Uniswap was already one of the most popular DeFi protocols, have played a crucial role in ensuring UNI tokens ROI for 8 months exceeds 9500%. They also helped drive UN token prices from $0.4803 and close to $8 in its first two days of trading and push it to set an all-time high of $44.97 on 3RD May 2021.
For the past ten days, however, UNI prices have been looped in a wild bearish trend that saw it shed more than $7 to trade at $37.37 (14th May). Analysts and investors attribute this to a plateauing crypto market growth, evidenced by the fact that even Bitcoin has failed to sustain its prices above the $60,000 mark in the past month. Others believe that the token volume scam perpetuated on Uniswap’s decentralized exchange may be finally catching up with the DeFi protocol and impacting its price growth.
Read More: Uniswap Price Analysis
Will Uniswap Prices Grow?
Yes, analysis suggests that the Uniswap UNI token prices are massively undervalued and will continue growing for the next few years. Most believe that it will double its current price to $80 by the end of the year or by the end of the current crypto market run and continue climbing towards $300 in the next five years.
Long Forecast is confident that Uniswap UNI token price will rise to $50 by August and reach the highs of $79 by December this year.
Crypto experts at Coinpedia are equally optimistic about Uniswap UNI’s future price action. They attribute its meteoric price jump witnessed this far to the Uniswap protocol upgrades, especially the recent launch of Uniswap V3. They believe that if the network continues to update its service offers and enter into strategic partnerships, it may end the year trading above $85 and rise past $300 within the next five years.
Other factors that experts believe will continuously influence the Uniswap UNI token prices in the future include competition from the likes of Sushiswap and Pancakeswap, the explosion of DeFi and NFT ecosystems, and the ongoing crypto market rally.
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Is Uniswap Worth Buying?
Most definitely Uniswap is worth buying because the network and its tokens continue to attract huge interest from the crypto community, especially due to its contributions towards the DeFi explosion. Currently, Uniswap ranks as the fifth-largest DeFi protocol operator and the second-largest decentralized exchange with more than $7.85 worth of Ethereum locked up in its liquidity pools.
Analysts believe that the DeFi ecosystem, which is only a few years old, will play a crucial role in shaping the future of the crypto industry. In supporting this argument, they point out to the fact that DeFi only started capturing the crypto community’s attention in June 2020, when it was worth around $700 million. 11 months later, it has morphed into an $83 Billion industry and more than 9% of this locked up in the Uniswap DEX.
As the DeFi crypto’s popularity continues to flower, analysts expect Uniswap to continue carving out more niche, increasing the popularity and demand of its UNI tokens and ultimately pushing up their prices.
Will Uniswap Bounce Back?
Yes, most UNI investors and DeFi ecosystem specialists believe that the recent setbacks to the Uniswap token prices will fade and that its prices will go back up again.
Unlike other cryptocurrencies like Bitcoin or Ripple, whose price growth is tied to their mass adoption by merchants, Uniswap token prices will be influenced by the growth of the DeFi ecosystem. And crypto industry experts, as well as traditional investors, already agree that DeFi is a force to reckon with.
Recently, a celebrated entrepreneur and crypto enthusiast – Mark Cuban – compared the current developments in the DeFi ecosystem to the early days of the internet. He went on to add that DeFi’s and NFTs have a huge potential for explosive growth in the next few years.
With Uniswap as one of the lead players in this ecosystem, it is safe to rightly assume that its network and token price growth will also reach explosive heights during this period.
Is Uniswap a Good Investment in 2021?
Most definitely, especially when you consider the fact that Uniswap token has recorded a 900%+ price jump, from $4.9 to $44.97, in the last four months. Further, the crypto market analysts and Uniswap investors are confident that the token prics will keep rising for the better part of 2021 and beyond.
Experts at the Wallet Investor price prediction website are especially confident that the value of one Uniswap UNI token will grow by more than 280% to trade at $113 by December 2021.
Their optimism is shared by crypto market analysts at the Coin Price Forecast website. These believe the price of Uniswap token will reach $58 by June 2021 and grow by more than 139% to end the year, trading at around $96.
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- Analysis by crypto market experts suggests that Uniswap tokens will double their price and trade above $80 by the end of 2021.
- More bullish UNI token price projections suggest that the digital asset prices will reach $300 in the next five years.
- The explosive growth being witnessed in the DeFi ecosystem is expected to play a key role in influencing Uniswap’s future price action.
- Started in 2018 and only launching its native token in late 2020, Uniswap has morphed into one of the biggest players DeFi ecosystem – currently accounting for as much as 9% of the locked-up funds.
- A plateauing crypto market run and token scams in the Uniswap DEX maybe have played a crucial role in its recent price drop.