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Why Cosmos Dove 13% Over the Weekend

By Demitri Kalogeropoulos – Updated Dec 6, 2021 at 10:33AM

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The wider crypto market slumped on Saturday.

What happened

Cosmos (ATOM -0.46%) investors endured significant losses over the weekend, with the value of the cryptocurrency slumping 13% from its closing price on Friday. The digital asset was caught in a broader market slump that impacted most cryptocurrencies.

So what

Bitcoin shares crashed by 17% at one point on Saturday, dragging many alternative cryptocurrencies lower in the process. These assets can be especially volatile in weekend pricing due to lower trading volumes.

The increasing use of margin by speculative investors in Bitcoin and other currencies amplifies that risk of major price swings.

A person looks at a tablet displaying a chart.

Image source: Getty Images.

Cosmos wasn't immune to this pressure over the weekend and the crypto opened trading down 12% by 10 a.m. EDT Monday. The value has still surged since the start of the year, up over 300% in 2021.

Now what

While it's impossible to predict how Cosmos' value will change over the short term, investors' bullish thesis relies on a few concrete factors. For one, watch for whether staking volumes continue climbing even through periods of falling prices like the one investors saw over the weekend.

Cosmos also needs to prove its usefulness through greater uptake of its platform as a store of value. Its creators hope to show benefits as an alternative to Bitcoin, including faster scaling and easier integration for developers.

Wins here should help Cosmos prove out its concept over time, but crypto investors can still expect lots of volatility when holding this asset.

Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bitcoin. The Motley Fool has a disclosure policy.

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