Why Zilliqa (ZIL) Has Gained 270% in the Past Week

Zilliqa's back in the top 100 cryptos by market cap. Can it hold its position this time?

Zilliqa (ZIL) is on fire. The smart contract crypto has stormed back into the top 100 cryptos by market cap with a price gain of 65% in the past 24 hours and over 270% in the past week. According to CoinGecko, at the start of this month, ZIL was trading at around $0.04, while today it topped $0.17.

Zilliqa is a programmable blockchain that initially positioned itself as an Ethereum (ETH) alternative. However, it lost ground last year. At the start of 2021, it was one of the top 50 cryptos by market cap, but by the end of the year it had all but slipped out of the top 100. As I write this, Zilliqa is ranked No. 60 in the crypto charts.

So what prompted such an incredible growth spurt? The main reason is excitement over Zilliqa's metaverse. But that's not all. Here are three reasons for the surge.

1. Zilliqa's metaverse is due to launch in April

Zilliqa's metaverse, Metapolis, has been in the pipeline for some time. As the VIP launch in Miami on April 2 approaches, excitement has grown. Zilliqa says it's already raised $2 million in prelaunch revenue from its client pipeline.

Earlier this week Zilliqa announced a partnership with Agora, a global talent awards app. According to a press release, the idea is that the deal will offer new ways for content creators to engage, both through the metaverse and industries such as esports, luxury, music, health and wellness, and more. Zilliqa says Metapolis will offer new layers of engagement for both the digital and virtual worlds.

2. Zilliqa's esports partnerships

Zilliqa says it's becoming the blockchain of choice for the esports industry. Last week, it announced a deal with three esports companies:

• Ninjas In Pyjamas (Sweden)
• RRQ (Indonesia)
• MAD Lions (Spain)

The deal means Zilliqa will work with each company to develop their Web 3 solutions, particularly in terms of NFTs, tokenization, and a presence in the metaverse. Some analysts predict the esports industry could grow to $2 billion this year.

3. The whole crypto market is on the up

Zilliqa's gains dwarf those of more established cryptocurrencies like Bitcoin (BTC) or Ethereum. Nonetheless, after a tough start to the year, Bitcoin gained about 20% in the past two weeks -- and prices surged across the board. Market sentiment moved from "fear" or "extreme fear" into "greed" for the first time in several months. This newfound optimism may have made investors less cautious about investing in smaller cryptocurrencies and also contributed to Zilliqa's surge.

Should you buy?

It's always risky to buy a crypto that's just gained over 270% in such a short period of time. Zilliqa may go on to reach even greater highs, but it could also fall back again. One challenge in crypto investing is that hype and speculation can push prices to unsustainable levels. Without solid fundamentals to use for a valuation, it can be extremely difficult to predict what will happen next.

For example, there've been many instances of buying the rumor and selling the news. This is a phenomenon where the excitement around what may happen pushes prices up, only for them to fall when the anticipated event actually happens. For example, Cardano's (ADA) price hasn't recovered from the hype before its smart contract launch. However, we've seen other cases, such as Solana (SOL), where the cryptocurrency's price defied all expectations and continued to trend upwards for a number of months.

What's important is to do your own research and make a decision based on your own investment goals. Bear in mind that Zilliqa is available from some top cryptocurrency exchanges in the U.S., including Binance.US, KuCoin, and Crypto.com. It is not supported by Coinbase or Gemini.

Look at how you think Zilliqa might perform in the coming five to 10 years -- and don't rush into a decision because you're scared of missing out. Metaverse tokens are exciting and could be a growth area, but there are a lot of metaverse projects out there. Look at how Zilliqa compares with the competition and try to evaluate whether it's got what it takes to survive.