Cosmos (ATOM) Pumps 64% for Week, But Can This Altcoin Be Trusted?
Cosmos (ATOM) surprised everyone earlier in the week by quietly inserting itself into the market cap top fifteen. In the past seven days the coin has pumped over 64%, with most of the growth arriving shortly after its listing on Binance.
By Saturday morning ATOM trade volume peaked as high as $191 million. However, a quick glance at the source of those trades leaves one with a lot of questions.
Particularly, how much of Cosmos’ numbers can be trusted given that they mostly originate from exchanges known for inflating volume? How does a coin go from an ICO price of ten cents to five bucks seemingly overnight? And when is this pump going to come to a crashing halt?
Cosmos Trade Volume: Untrusted Sources
Outside of Binance, just one the top sixteen exchanges for ATOM trades made it into Bitwise’s assessment of trusted platforms when they applied for a Bitcoin ETF. That isn’t damning in itself, however, a closer look at the exchanges in question reveals some well known inflationists.
Platforms like Bibox, Huobi, Hotbit, Upbit and OKEx processed more than half of ATOM’s $191 million volume on Saturday. All of them have been accused of inflating trade volume in the past – many of them by as much as 95%.
If we compare those multi-millions to the numbers present on more trusted exchanges like Bittrex, Bitfinex, Kraken and Poloniex, we see a huge discrepancy. Those four exchanges combined produced just over $11 million worth of trades, with Bitfinex processing just $120,000 on the day.
Of course, then we have Binance, which handled the highest concentration of Cosmos trades totalling $37.5 million, or 3,700 BTC at time of writing. There’s enough reason to assume Binance’s numbers aren’t entirely accurate either – more on which can be read here.
What Does That Mean for the Cosmos Price?
The Cosmos initial coin offering was conducted at a price of $0.10. Today the spot price stands at over $5. It may seem like Cosmos just appeared overnight, but its ICO was launched in late 2017, and a large amount of coins had been locked up in a contract until just a few weeks ago.
The combination of high fake volume and relatively low exposure on trusted exchanges leaves Cosmos’ true value open to speculation. How much did fake volume contribute to the price pump on all those shady exchanges before the general public even laid eyes on it?
But to give Cosmos its due, much of its recent growth came after a listing on Binance. Indeed, in the four days since then the ATOM coin price has jumped 41%. This was the same day accurate circulation numbers became available for the coin, as seen by the introduction of the blue market cap line in the graph below.
This would suggest that regardless of what happened up until now, investors were still willing to take a punt on Cosmos when it became available. The question now is, how long can a coin with 50x growth sustain its current surge?
In the week leading up to Saturday the value of one ATOM coin climbed from $3.40 up to a peak of $5.58 – 64% growth. That peak arrived in the early hours of the morning (UTC), and was short ultimately lived as the coin price fell back to the low $5 range.
On Saturday alone Cosmos gained 14% and then lost 10% – all within the space of 24 hours. From here on out, even the most hopeful of Cosmos holders must be expecting some kind of correction. That’s unless Cosmos was able to subvert the downwards pull of the bear market over the past year and a half. Take a look at some of the projects and partnerships involved in the Cosmos ecosystem and make a decision for yourself.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.