The CELO network features a stability protocol capable of hosting an ecosystem of stable value currencies like the CELO Dollar. So to understand how valuable CELO actually is, we will be taking a dive into what blue chips are in DeFi and how does this reflects onto CELO.
What are Bluechips? #
The term blue chip is used in the corporate world to refer to financially stable companies with inherent profitability mechanisms even in challenging economic circumstances. In crypto, blue-chip alludes to blockchain currencies with a market capitalization of at least $2 billion.
What exactly is the “DeFi Blue Chip” of Cryptos? #
DeFi (decentralized finance) is disrupting the cryptocurrency industry. Though Ethereum is practically the hosting pioneer of the DeFi platform, newer applications are emerging to offer financial solutions through smart contracts by carrying out agreements between two or more parties without an intermediary.
By disrupting the traditional cryptocurrency scene, DeFi appears to usher in a new crypto age.
The applications offer more than the primary exchange-of-value task but allow for financial services like loaning, lotteries, and purchase of crypto coins whose value peg to that of a popular fiat currency or commodity.
There is no middleman and round-the-clock access or even combined with quick settlements. This makes DeFi attractive.
Let’s consider that Chainlink (LINK), Wrapped Bitcoin (WBTC), and DAI as the blue-chip DeFi coins. The three possess a relatively high market cap of over $1.0 billion – which Ethereum’s blockchain hosts all of them!
Now Let’s get into CELO’s bluechip! #
- A Solid Team – The CEO and Co-founder, Rene Reinsburg, along with the other founders, has a proven track record in venture capital and early stage startups.
- Leading Investors – Investors include industry heavyweights such as a16z, Polychain Capital, and Coinbase Ventures.
- A Compelling Use Case – Celo is focusing on peer-to-peer payments based on wallets that are linked to mobile phone numbers. For CELO, the target market is Africa and the emerging world, where financial infrastructure is still underdeveloped. CELO has issued the cUSD & cEUR stable coins. The CELO itself serves as a reserve asset for the stable coins and serves as a governance token.
- End-User Adoption – CELO has its own wallet called Valora. The number of CELO network addresses has increased sharply in the past quarter.
- Enterprise Adoption – It was recently announced that Deutsche Telekom, the largest telecommunications provider in Europe, supports CELO as an investor and a validator. In total there are more than 130 members in CELO’s alliance for prosperity.
- Low Market Cap – $CELO has a market capitalization of a little more than 1.8 billion USD. This is still low enough to absorb a significant price move in a retail-driven mania.
- A Token Price close to 1$ – This year is 2021 and we are back in a bull market (for now) with lots of new retail folks entering the market. From analyzing retail behavior over various years – retail investors disproportionately invest in cryptocurrencies that are close to 1USD. It is remarkable that retail thinks like this but definitely one of the reasons for the very strong performance of $ADA and $XRP during bull markets. The fact that $CELO trades around 5$, not too far from 1$, certainly doesn’t hurt.
- CELO Market Potential – The trajectory of CELO so far has been “pumpy”. The price was mostly flat but went through several pumps which indicate that the price can easily be moved in the event of retail hype. Lets not forget that significant hype levels in January 2018 brought $ADA to more than 30 billion USD in market cap in just a few short months. This is not financial advice, but a blue-chip altcoin like CELO could therefore certainly reach a similar valuation at the peak of the 2021/22 cryptocurrency bull market.
Conclusión #
In Theory, CELO has all the tick marks to blossom in the bull market. With CELO’s strong team, leaders, and large alliance – this ensures stability in the company’s future. Retail investor behavior is the only thing that halts the full capacity of this CELO soaring. One thing however is certain, that CELO will be around for a little while longer.
