by Emma Newbery | Published on Sept. 18, 2021
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Find out why Fantom has posted significant gains this year.
Smart contract cryptocurrency Fantom (FTM) has gained almost 7,000% since the start of this year -- even more than the popular crypto Dogecoin (DOGE). Fantom reached an all-time high of $1.93 on Sept. 9, according to CoinMarketCap data. At that point, if you'd have bought $1,000 of Fantom on January 1, it would have been worth almost $100,000.
Even after this week's drop, Fantom's price is still up over 350% since the start of August alone as investors pile into various Ethereum (ETH) alternatives.
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Here are two key drivers behind Fantom's dramatic growth.
Fantom is one of several cryptocurrencies with smart contract capabilities. Smart contracts are tiny pieces of self-executing code that live on the blockchain and allow it to run programs and applications.
Smart contracts are crucial for the burgeoning decentralized finance (DeFi) industry. DeFi is an umbrella term for a number of applications that take the middleman (banks) out of financial transactions. And smart contracts are the not-so-secret sauce in DeFi.
They can be programmed to execute automatically when certain conditions are met -- for example, an insurance policy might pay out without anyone needing to make a claim. Or a loan might pay back the collateral automatically as soon as the loan balance is paid off.
Non-fungible tokens (NFTs) are another booming trend fueled by smart contracts. Authorship, ownership, and copyright information is embedded into these digital collectibles. From cute CryptoKitties and Degenerate Apes to million dollar works of art and sports trading cards, NFTs are taking the world by storm.
First-mover Ethereum is still the biggest smart contract crypto by a long way. But it is comparatively slow and struggles with network congestion and high fees. As a result, a number of newer, faster, cheaper cryptos like Fantom are vying for market share.
Fantom has made several big announcements this year -- most recently, a partnership with international digital assets platform Fireblocks. Fireblocks serves over 200 financial institutions and secures over $400 billion in digital assets.
Coinbase wallet listed FTM this month, though the token isn't available on the Coinbase exchange. FTM is available from several top cryptocurrency exchanges.
It also partners with several big crypto projects like Chainlink (LINK) and The Graph (GRT). Plus, it has real-world projects running in Pakistan, Tajikistan, and Afghanistan.
Cryptocurrency prices are notoriously volatile and difficult to predict, and it is always risky to buy a coin right after it hits an all-time high, as Fantom did last week.
There are various trading strategies you can employ to balance out that risk -- for example, buying a smaller amount at a set time each week or month rather than one big amount in one go.
Ultimately, the best way to protect yourself against volatility is to only invest money you can afford to lose, and to buy for the long term. Base your investment decision on how you think the coin is going to perform in the next five to 10 years. That way, if it suddenly drops in value, you can wait out the dip.
Research the coin's fundamentals -- from its management team to its roadmap for the future. Read Fantom's whitepaper and compare it to other digital currencies in the same space. Our recent article on Fantom would be a good place to start.
There are many things in the world of crypto that we can't predict, which makes it all the more important to be diligent with the things we can control.
As you can see from above, Fantom is a strong cryptocurrency project with a lot of potential. However, here are some factors that could knock FTM sideways:
Overall, there are solid reasons for Fantom's growth this year, but it is still an incredible jump in price. The token may still grow further in the long term, but if you buy hoping for another 7,000% rise, you'll likely be disappointed.
There are hundreds of platforms around the world that are waiting to give you access to thousands of cryptocurrencies. And to find the one that's right for you, you'll need to decide what features that matter most to you.
To help you get started, our independent experts have sifted through the options to bring you some of our best cryptocurrency exchanges for 2021. Check out the list here and get started on your crypto journey, today.
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Emma Newbery owns Bitcoin, Ethereum, The Graph and Chainlink.
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