In a choppy market for cryptocurrencies over the first quarter of 2022, Near Protocol (NEAR -1.37%) stands out with a roughly 6% gain so far this year, which is the largest year-to-date increase among the top 20 cryptocurrencies by market cap; it has gained about 36% in past 30 days alone. For context, Bitcoin is down about 6% over the past month and down 15% for 2022, while Ethereum is little changed for the month and down 21% year to date. So what is Near, why is it performing well, and why could it be heading higher?
What is Near?
Near Protocol is a proof-of-stake cryptocurrency with an $10.5 billion market capitalization. After its strong month, it is now the 18th-largest cryptocurrency by market cap. Near enables smart contracts and prioritizes being a user-friendly and developer-friendly platform. For example, developers can build applications for Near using common programming languages like Rust and AssemblyScript without having to learn a new language just to build on Near. Furthermore, its Aurora protocol is compatible with the Ethereum Virtual Machine (EVM), which means that Ethereum developers can easily bring their applications to the platform.
Near has surged on news it has raised $350 million in a funding round led by famed investment manager, Tiger Global. Other cryptocurrencies like Avalanche have been able to use influxes of funding to spur development on their platforms.
Is Near the next Terra?
Innovation and development seem likely to include the launch of Near's dollar-denominated stablecoin, dubbed USN, which may launch as early as this month.
You can't really talk about stablecoins without discussing Terra (LUNC -2.03%). Terra has evolved into one of the most prominent cryptocurrency networks and has had great success with algorithmic stablecoins. Its TerraUSD (USTC -0.95%) coin now has a $17.5 billion market cap. A stablecoin is a type of cryptocurrency where the price is meant to be stable over time and correlated to the price of another asset, like the U.S. dollar. They are useful as stores of value within a crypto ecosystem or to facilitate payments because they don't fluctuate in price like other cryptocurrencies. Terra burns its native Luna token when users want to mint more UST, so increased demand for UST is beneficial for Luna holders. It seems that Near Protocol will follow a similar mechanism with USN, so the launch of its own stablecoin should be a boon for Near holders and the network as a whole. If USN becomes widely adopted, this will be a significant catalyst for Near Protocol.
Near is about a third the size of Terra by market cap. It will take a long time and a lot of adoption for it to become the next Terra. But with the pending launch of its USN coin, Near seems to be taking the first steps on this path. Even if it doesn't eclipse Terra, there is still a lot of room for upside between where it is now and where Terra sits.
Is Near coming to an exchange near you?
With all of this exciting development, it can be somewhat surprising to learn that Near is not yet on many of the major crypto exchanges, including two of the largest and most visible in the U.S., Coinbase and FTX. Given that FTX Ventures is an investor in Near's aforementioned funding round, it seems likely that Near will eventually be listed on FTX. There has been discussion that it will soon be listed on Coinbase as well. Getting listed on major exchanges like Coinbase and FTX would be a catalyst for Near because it would increase volume and make it available to a significantly larger base of investors who may be interested in it now but not able to purchase it.
Is Near a buy?
Near has roared to new heights in 2022. The funding round has the potential to spur innovation and development. The potential launch of its USN stablecoin could be another catalyst, while listings on exchanges like Coinbase and FTX mean that the best may be yet to come for Near Protocol and its investors.