What triggered the parabolic spikes in ADA, KNC, MATIC and other crypto assets activating staking?

By Emma On Jul 12, 2020

Many cryptocurrencies have gone parabolic in recent weeks. For example, ADA has increased by more than 600% since the low in March and over 60% since the beginning of June.

ADA chart since March. Source: TradingView

Or take another example, KNC. The altcoin has increased by 200% in the past three months, reaching an all-time high since May 2018.

According to research firm Messari, the momentum for most of the altcoins now and in the past year is staking.

Staking is promoting parabolic rallies

For most market participants, the altcoins that have risen in price seem to be a random mix. But, Messari said that there is a common theme running through recent crypto market action.

The staking implementation varies from blockchain to blockchain and protocol to protocol but the main idea is as follows: Users can lock cryptocurrencies into a smart contract, then receive interest to keep assets there.

Messari shared the chart below on July 10, showing that many cryptocurrencies outperformed the three months leading up to its staking launch.

Elrond (ERD) increased by 639% in the three months leading up to its staking launch.
Zilliqa (ZIL) increased by 432% in the three months leading up to its staking launch.
Kyber Network increased by 206% in the three months leading up to its staking launch.
Cardano (ADA) has increased by 175 percent in the past two months and one week, and there are still three weeks leading up to its staking launch.
Matic Network (MATIC) grew by 79% in the three months leading up to its staking launch.
And 0x (ZRX) increased by 45% in the three months leading up to its staking launch.

Two cryptocurrencies that recently launched staking, Synthetix (SNX), and Harmony (ONE), actually dropped in the three months ahead of of their upgrade. But, both increased sharply after their staking system was activated.

Cardano’s $ADA is up 270% over the last 3 months as it heads towards its PoS launch

ADA is not the only token that has spiked leading up to a staking upgrade:$ERD: 639%$ZIL: 432%$KNC: 206%$MATIC: 79%$SNX: 45%

Full: https://t.co/YHsje9cLxL pic.twitter.com/sjvqFmfQ2i

— Messari (@MessariCrypto) July 9, 2020

According to Messari researcher Wilson Withiam, the extremely strong performance of staking-enabled cryptocurrency assets could be attributed to investors seeking profits in a yield-starved industry:

“In an industry starved for yield, staking is in high demand. And investors should pay attention to new staking as potential catalysts for price action.”

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