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Why Near Protocol, Luna, Cosmos, and Fantom Skyrocketed Higher Today

By Travis Hoium – Dec 22, 2021 at 12:55PM

Key Points

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Growing the cryptocurrency ecosystem is being rewarded by investors these days.

What happened 

Cryptocurrencies continue to be volatile assets heading into the new year, but there's some positive news coming from what we often call altcoins. In the last 24 hours, Near Protocol (NEAR -3.38%) was up as much as 30.7% and is trading 30.1% higher at 11:50 a.m. ET, leading the crypto market. 

Smaller but still major moves were being made by other altcoins. Terra's Luna (LUNC -2.24%) coin popped as much as 15.3%, Cosmos (ATOM -3.21%) jumped 18.1%, and Fantom (ATOM -3.21%) was up 16.9%. The cryptocurrencies are up 8.5%, 18%, and 12.7% respectively as of 11:50 a.m. 

Blocks labeled "NFT" connected by nodes.

Image source: Getty Images.

So what 

Late on Tuesday, Near announced that blockchain protocol Terra would integrate the UST stablecoin (a coin that aims to peg to the U.S. dollar) in Aurora on the Near ecosytem. This is intended to give users more ability to trade assets like tokens using UST as a medium of exchange. For example, if I have a token called TOKEN-A and I want to exchange it for a token called TOKEN-B, there may not be an exchange directly between the two. Aurora helps enable users to exchange TOKEN-A for UST and then UST for TOKEN-B. This partnership aims to make these transactions easier and more efficient for Terra and Near users.

Altcoins often move in tandem and that seems to be what's happening today. Neither Cosmos nor Fantom have big news out about them but they are moving along with Terra's and Near's cryptocurrencies. This is likely investors betting that continued advances in cryptocurrency ecosystems will bring more innovation and trading and ultimately higher cryptocurrency values. 

Now what 

Smaller cryptocurrencies may not get the attention of their bigger rivals, but I would argue that the real innovation is taking place in ecosystems like Near, Terra, and others. Developers are building new tools for creators and companies to unlock value and making concepts like tokens more available and liquid can continue that innovation growth. 

In 2022, investors will want to watch just how quickly users move to any of these given ecosystems. Building tools is great, but attracting a critical mass of creators and users will be critical whether you're building finance products or non-fungible tokens. That will be the real challenge. 

It's also important to keep in mind that cryptocurrencies will likely be very volatile over the next year. The market is facing a likely increase in interest rates and growth stocks have already started selling off, which hurt cryptocurrencies as well. And millions of people flooded into cryptocurrencies this year, which may not happen again in 2022. That's why keeping an eye on the long-term strategy for these cryptocurrencies is key -- because long-term growth will be driven by whoever can build the biggest ecosystem. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool owns and recommends Terra. The Motley Fool has a disclosure policy.

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