What’s up with the price of Polygon (MATIC)?

Some cryptocurrency assets, like Polygon (MATIC), are outperforming the market trend, while others, like Monero (XMR), are underperforming it.

The price of a number of cryptocurrencies is currently following the broad trend set by Bitcoin and Ethereum because the trend in the cryptocurrency markets is currently very smooth.

MATIC is a native cryptocurrency of Polygon and an Ethereum ERC-20 token. A Layer-2 solution for Ethereum called Polygon has its own blockchain and uses MATIC as its native coin to enable quicker and, more importantly, less expensive transactions. First of all, it’s important to note that MATIC’s 2022 hasn’t been as taxing as many other cryptocurrencies.

The price did drop from a high of $2.92 in December 2021 to $0.38 in June 2022, although the percentage loss of -87% was lower than that of many other second or third-tier cryptocurrencies.

Throughout the same time period, ETH lost less money, but Ethereum and Bitcoin have separate histories. The rise of Polygon was interesting because it started as early as July 2022. In other words, the most recent bear market finished six months earlier than it did for the majority of other cryptocurrencies.

It suffices to remember that, at the peak of the bear market, its price was back at $1 in August 2022, having increased by 163% in less than two months. Although its price had gone back beyond $1.2 right before the crypto markets crashed as a result of the FTX bankruptcy, it later fell back below $0.8, which was the price at which it closed in 2022.

Its value nearly quadrupled in the first six weeks of the year, reaching $1.5 shortly after mid-February. At that time, it appeared as though Polygon’s MATIC might be one of the major participants in the 2023 cryptocurrency markets, but instead, it started to fall. With a decrease that caused it to lose 27% and drop to $1.13, the downturn has now extended for more than two weeks.

More about Polygon (MATIC)

Yet, the current level is still up to 48% higher than it was at the start of the year and up to 197% higher than the low point in 2022. In other words, even though MATIC’s price is not doing well in the short term, it is still doing very well in the medium to long run. It is sufficient to point out that the price was below $0.02 in December 2020, before the last significant bull run was set off.

Remembering that MATIC has a practical use within the Polygon blockchain is crucial, as more people will demand MATIC as Polygon is deployed. The graph of the number of daily transactions on Polygon’s blockchain makes it very evident that there has been no slump since the early 2021 peak.

In reality, since October 2021, there have been between 2 and 4 million daily transactions, indicating the prominent and ongoing use of this blockchain. The parallelism resides in the fact that the volume of daily transactions has not decreased even on the Monero network.

Contrarily, it has even been varying between 15,000 and 40,000 since the beginning of 2021, with a consistency that makes one pause.

Although Polygon trades at much larger volumes than Monero, it is important to acknowledge that many NFTs are circulated on the Monero network, even though only XMR tokens are traded on the Monero blockchain.