Michael Byrne, an analyst at the US-based consulting giant The Motley Fool, drew attention to a cryptocurrency. He stated that this cryptocurrency is ready for strong moves in 2023. Here are the details…
Analyst bullish for this cryptocurrency
Michael Byrne, an analyst at US-based The Motley Fool, pointed to a long-standing altcoin, Tron (TRX). Tron may never have gotten the excitement some cryptos get during the bull market. However, this is not a bad thing. Rival blockchains like Solana and Avalanche have seen a 90 percent loss from the start of 2022 to date, while Tron has seen a 28 percent loss in the same period. So the bear market didn’t stop Tron from outperforming them. Tron is even better than Bitcoin and Ethereum, the two top cryptocurrencies, which have dropped 65 percent and 68 percent respectively to date.
Tron is an open source smart contract platform that allows users to build and deploy decentralized applications just like Ethereum. Like Ethereum, Tron is a proof-of-stake, layer 1 blockchain. At one point, Tron was originally an ERC-20 token before switching to its own blockchain in 2017. As we reported as Kriptokoin.com, the Tron mainnet was launched in 2018. Since 2018, the Tron network has processed over $6 trillion in transactions. Tron’s market cap is currently just over $5 billion.
Total locked value over $4 million
With a total unlocked value (TVL) of over $4 billion, Tron has outstripped other blockchains in TVL apart from the much larger crypto, Ethereum. Total value locked is a measure of the value of all assets locked or committed to a smart contract platform such as Tron or Ethereum. That $4 billion total valuation dwarfs the likes of Solana and Avalanche, which currently have a locked total of $215 million and $780 million, respectively.
According to the analyst, investors can consider the total value locked in a platform and divide that by the market cap of the coin to get an idea of whether the crypto asset is undervalued or overvalued. Dividing the market value by the locked total value gives you a number similar to calculating the book-price value of a traditional stock. Based on this metric, Tron has a market cap/TVL ratio of approximately 1.2. According to the analyst, this looks particularly attractive compared to the current market cap ratios of Ethereum (6.3X), Solana (19X), and Avalanche (4.6X).
What is Tron’s “killer app”?
Much of Tron’s appeal lies in its speed and very cheap transaction fees. The TRON network can process 2,000 transactions per second, and fees can be as low as $0.000005. While many Blockchains have high performance, this combination has made Tron an attractive Blockchain for users from all over the world, especially in emerging markets. Tron stands out because many people use Tron: there are 131 million Tron accounts. The Tron network has so far processed 4.5 billion transactions and over $6.3 trillion has been transferred using Tron.
Tron is heavily favored for stablecoin transactions
Because it is very inexpensive to send assets using the Tron Blockchain, it is an attractive blockchain for users who want to transact with stablecoins such as Tether (USDT) and USDC (USDC). At the time of this writing, over $16.3 billion in Tether has been transferred using the Tron network in the last 24 hours. While USDC, the second largest stablecoin, is not that popular on Tron, over $1.5 billion in USDC has been transferred to Tron in the last 24 hours.
Tether’s market cap on Tron is around $31 billion, making the stablecoin the best Blockchain for Tether. It surpasses even the much larger Ethereum with a Tether market cap of around $28 billion. In countries like China, where exchanging local currency with cryptocurrency is occasionally prohibited, Tether gives people the opportunity to enter and exit crypto.
In many countries, Tether has become a viable US dollar substitute for people who want to invest in US dollars. Especially to reduce the volatility of local currencies or make cross-border payments. Tron was often an integral part of this process. In developing countries (many countries in Africa, Asia, the Middle East and Latin America) where apps like Paypal or Apple Pay are not available, sending and receiving Tether via Tron is a convenient method for dollar transactions.
How will cryptocurrency move in the future?
Tron has been around for a long time and has survived a crypto winter before. According to the analyst, this shows something. With a large, global user base and a compelling use case (sending stablecoins around the world quickly and cheaply), Tron is a good bet to outrun many of its more glamorous competitors in 2023, according to the analyst. In terms of adoption and use, it looks like a crypto worthy of a place in a crypto portfolio.