A lot has happened this year in 2022. The crypto market had a bearish year while crypto exchanges and companies were shaken to their core. On the other hand, crypto adoption increased as big companies entered the Metaverse and the Digital world. Why is MATIC price down while Polygon adoption is up?
What is Polygon Blockchain?
Polygon (formerly known as Matic Network) is a blockchain platform that provides infrastructure for building and connecting decentralized applications (dApps). It is designed to be a scalable and secure layer 2 solution for the Ethereum blockchain, meaning that it is built on top of Ethereum and aims to improve the speed and scalability of Ethereum by allowing transactions to be processed off-chain and then anchored to the Ethereum blockchain.
One of the main features of Polygon is its support for a variety of blockchain protocols, including Ethereum, Ethereum Classic, and PoA (Proof of Authority). This allows developers to build dApps on Polygon using a variety of protocols, depending on their specific needs.
In addition to providing infrastructure for dApp development, Polygon also offers a range of tools and services for developers, including a development kit, documentation, and support for smart contract development.
What is MATIC Crypto?
MATIC is an ERC-20 token, which means it is built on the Ethereum blockchain and follows the ERC-20 standard. This standard defines a set of rules that all ERC-20 tokens must follow, including how the tokens can be transferred and how smart contracts can interact with them.
In addition to being used to pay transaction fees on the Matic Network, MATIC tokens can also be used to participate in the governance of the Matic Network by voting on proposals to improve the network. MATIC tokens can also be bought and sold on cryptocurrency exchanges.
Why is MATIC Price Down?
Cryptocurrencies still move in the same direction, especially in tandem with Bitcoin. If the general movement is upwards, MATIC would follow, and the opposite is also true. Despite its recent usage by multinational corporations, MATIC price crashed by more than 30% in the past 3 months. The reason simply is that the crypto market is still crashing due to many reasons:
- The FTX crash caused uncertainty in the crypto market
- Regulatory changes: Governments and regulatory bodies around the world have different approaches to cryptocurrencies. Changes in regulations or the introduction of new regulations can affect the market.
- Market demand: The aggregate demand for cryptocurrencies affects overall prices. When bad events happen in the crypto market, demand becomes much less, putting a pressure on lower prices.
MATIC 2023: Will MATIC price recover next year?
Polygon has the potential to improve the scalability, speed, and user experience of Ethereum-based applications, which could make it an attractive project for developers and users. However, the current crypto market is bearish, which makes it bad to invest in MATIC currently.
In Q3 2023, the crypto market should rebound and MATIC should also go back on its uptrend. Once this happens, MATIC should increase and has no problem reaching its all-time high of around $3.
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