Celo is a Defi crypto from the Ethereum network. While it hasn’t seen the growth other coins have, it seems to be an undervalued asset that has great potential to dominate the market as more users and platforms adopt it.
Mobile-focused cryptocurrency Celo had a price spike of almost 150% on 30 August when the developers announced partnerships to expand its adoption. Since then it has struggled to maintain that value and at the time of writing (8 December), it had fallen to $3.54.
What is Celo and how does it work? What has been supporting the coin?
In this article, we address those questions and look at some of the forecasts for the long-term CELO/USD price outlook.
Celo targets mobile DeFi users
A relative newcomer that launched in April 2020, Celo is a mobile-based blockchain platform that aims to make financial decentralised applications (dApps) and cryptocurrency payments accessible to smartphone users anywhere in the world, including those who do not have traditional bank accounts. Celo now has more than one million wallet addresses across 113 countries.
Celo was founded by a large team of contributors from the public and private sectors, technology companies, non-profit organizations, and non-governmental organizations. They are involved with pilots, committees, and working groups, including the World Economic Forum, World Bank Group, and the Chamber of Digital Commerce.
How does Celo work? It uses an address-based encryption protocol that aims to simplify cryptocurrency transactions by using a phone number or email address as a public key. The network is compatible with the Ethereum Virtual Machine (EVM) and runs an ERC-20-compliant CELO token. The native token is used for governance and transaction fees.
Celo has also launched a stablecoin, the CELO DOLLAR (CUSD), to act as a payment method for users who are looking for price stability. It plans to host more stablecoins on the platform in the future.
According to Celo’s white paper: “The Celo protocol introduces a mobile block-reward mechanism in which all users involved in transactions are also able to participate in verifications, creating a broad participant base and making block rewards more accessible to day-to-day users.”
Celo has a maximum supply of one billion tokens, of which 347.3 million are currently in circulation, giving it a market capitalisation of $2.20bn. This also makes it the 71st largest cryptocurrency at the time of writing (8 November).
On 30 August, a consortium of Ethereum decentralized finance (DeFi) projects announced a collaboration called ‘DeFi for the People’. This platform will be built on Celo, with the aim of bringing DeFi applications to mobile users around the world. The founding partners include Aave, Curve, Sushi, PoolTogether, 0x, UMA, Valora, Ubeswap, and Moola Market.
The statement said: “This new program will offer more than $100m in educational initiatives, grants, and incentives. The majority of program participants will jointly contribute half the funds for incentive programs.”
The consortium plans to launch Optics later this year, which is a “gas-efficient interoperability protocol for cross-chain communication” that will enable users to move assets between Ethereum and Celo.
In the latest Celo news, it was announced on 23 September that Mysten Labs will join the Celo ecosystem through a multi-year partnership. Mysten Labs is a research and development lab focused on creating infrastructure for next-generation Internet (Web3) developers.
Mysten Labs will become a core contributor to the Celo platform, starting with changes to consensus innovations and coding language that will increase its speed and capacity. The announcement said: “When combined with Plumo, Celo’s ultra-light client protocol, these changes will make Celo an even more scalable, decentralized platform where tens of thousands of full nodes can be incentivized (at the protocol level) to service hundreds of millions of light clients. This network topology will allow Celo to achieve Ethereum-like levels of decentralization, with the potential of Solana-like levels of performance.”
Leading decentralized exchange Sushi announced on 14 October a joint liquidity mining program on the Celo network, with $12.6 million worth of Celo and Sushi to be distributed as rewards. In teaming up with Celo’s “DeFi for the people” initiative users are able to earn both Celo and Sushi tokens when providing liquidity to the exchange on the Celo network.
On 29 October Celo announced a partnership with Orbit Bridge, a proof of stake consensus chain, to integrate Celo as an origination chain on Orbit Bridge. Its associated tokens will join the tokens currently supported by the Bridge. Celo users will be able to bridge tokens directly from the Celo chain to other chains connected to Orbit Bridge starting off with Klaytn and Orbit Chain. Other connected chains like Ethereum, BSC, HECO and Polygon will follow.
On 30 November it was announced that CELO could be traded on eToro.
On 3 December Ox Labs, owner of the open source Ox protocol, said it was expanding its partnership with Celo by jointly allocating $4.5m to the community-owned 0x DAO (Decentralised Autonomous Organisation). “The funding will be used to bring six billion new users onto 0x-powered apps running on the Celo blockchain,” said the company.
On 8 December Celo revealed it had handled 67 million transactions since starting up in April 2020.
Celo price analysis: climbing on collaborations
The price of the CELO coin spiked on 30 August in response to news of the DeFi consortium, as projects in the space continue to gain popularity.
The price jumped from $4.27 on 29 August to an all-time intraday high of $10.66 on 30 August. It subsequently slipped back to a low of $3.83 on 7 September but started to climb again, rising from $6.56 on 22 September to $7.62 on 23 September following news of the Mysten Labs partnership. The coin ended at $7.19 on 23 September. By 8 December it was down to $3.53.
Users are increasingly bridging ERC-20 tokens to the Celo network. The total value locked on Celo has climbed sharply, from around $167.2m at the end of 2020 to $556.5m on 30 August, then $798.0m on 1 September and $1.05bn on 8 November and $566m on 8 December according to data from DeFi Llama.
So, what is the outlook for the Celo to USD price if adoption of the protocol continues to grow?
Celo price prediction: can the token hold on to gains?
On 8 December, at the time of writing, short-term technical analysis from CoinCodex showed sentiment was neutral, with the coin trading around $3.53.
There were two indicators giving bullish signals and 23 bearish signals. The daily simple moving average (SMA) and exponential moving average (EMA) figures were giving sell signals, but the relative strength index (RSI) was bullish at 18.78, indicating Celo was a buy. An RSI below 30 is considered to be oversold, indicating the potential for a price gain. The stochastic RSI was also bullish at 7.57.
The CELO coin price prediction from WalletInvestor forecasts the cryptocurrency to average $3.844 by the start of 2022. The average price is then expected to move to $6.43 by the end of the year, rising to $8.997 by the end of 2023. The algorithm-based forecasting site expects the price to climb to $14.23 by the end of 2025.
DigitalCoin predicts higher prices in its Celo price forecast, with the coin averaging $6.21 in 2022, up from $5.17 in 2021. It projects the price may average $11.03 in 2025 and $15.69 by 2028
The long-term forecast from Price Prediction is more bullish, predicting the price could average $17.05 in 2025, up from $3.83 in 2021, and reach an average of $107.25 by 2030.
It’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it hard to predict what the price of the coin will be in a few hours – and even harder to give longer-term estimates.
We recommend you always do your own research and consider the latest news, market trends, technical and fundamental analyses, and expert opinion before making any investment decisions.
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