analysis of Polygon (MATIC) Monero- The Cryptonomist

by Arthur · March 6, 2023

There are some cryptoassets that outperform the general trend, such as Polygon’s MATIC, or underperform, such as Monero.

Table of Contents

Cryptoanalysis of Polygon (MATIC) and Monero (XMR)

At this time, the trend in the crypto markets is quite steady, so that the prices of several cryptocurrencies follow the general trend dictated by Bitcoin and Ethereum.

Polygon (MATIC)

MATIC is Polygon’s native cryptocurrency, as well as an ERC-20 token on Ethereum.

Polygon is a Layer-2 solution for Ethereum, allowing for faster and, more importantly, cheaper transactions, and it has its own blockchain with MATIC as its native cryptocurrency.

First, it is worth mentioning that MATIC’s 2022 has not been as burdensome as that of many other cryptocurrencies.

While it is true that the price went from a high of $2.92 in December 2021 to $0.38 in June 2022, the percentage loss of -87% was less than that of many other second or third tier cryptocurrencies.

ETH in the same period lost less, but Ethereum and Bitcoin are independent narratives.

What’s interesting about Polygon is that the rally started as early as July 2022. This is equivalent to saying that the last bear market ended six months earlier than most other cryptocurrencies.

Suffice it to think that by August 2022, the price was already back around $1, up 163% in less than two months, at the height of the bear market.

Despite the fact that just before the collapse of the crypto markets due to the FTX bankruptcy, the price had also already climbed back above $1.2, it later returned below $0.8, which is the level at which it ended in 2022.

In the first month and a half of the new year, it nearly doubled in value, rising above $1.50 just after mid-February.

At the time, it looked like Polygon’s MATIC could be one of the big players in the crypto markets in 2023, and instead it started to decline.

The decline has now lasted more than two weeks, with a drop that has seen it lose 27%, dropping it to $1.13.

However, today’s level is still a full 48% higher than it was at the beginning of the year, and a full 197% higher than the 2022 low.

In other words, even if the price of MATIC does not perform well in the short term, in the medium to long term, it still performs well. Suffice it to mention that in December 2020, which is before the last big bull run was triggered, the price was below $0.02.

It is important not to forget that MATIC has a concrete use within the Polygon blockchain, so the more Polygon is used, the more users demand MATIC.

The graph of the number of daily transactions on Polygon’s blockchain clearly shows that after the boom in early 2021, there has been no slowdown.

In fact, since October 2021, the number of daily transactions has fluctuated between 2 and 4 million, indicating the conspicuous and continuous use of this blockchain.

Monero (XMR)

In the case of XMR, the cryptocurrency native to the Monero blockchain, the argument is partly similar, but partly also very different.

The similarity lies in the fact that even on the Monero blockchain, the number of daily transactions has not plummeted.

On the contrary, it has even fluctuated between 15,000 and 40,000 since early 2021, with a constancy that gives pause for thought.

This is still much lower levels than Polygon, but it is worth mentioning that many NFTs are also traded on this network, while only XMR tokens are traded on Monero’s blockchain.

Monero remains the leading cryptocurrency with high privacy in terms of usage, and this consistent usage is also reflected in somewhat lower price volatility.

In fact, since the beginning of the year, XMR has practically not increased, although it has not lost either, with +26% in January followed by -19%.

Not only is the current price more or less the same as it was at the end of 2022, but over the past 2+ months, Monero’s price volatility has been significantly lower than that of other tier 1, tier 2, or tier 3 cryptocurrencies.

It is worth noting that XMR is capitalized at only $2.7 billion, ranking Monero only 25th among cryptocurrencies with the largest market capitalization. Just to have a point of reference, this is just over half of the Avalanche’s AVAX.

At this point, it’s not even that surprising that the all-time high of $517 in May 2021 was not much higher than the previous cycle, which was reached in early 2018.

Additionally, if we exclude the peaks, both of which were reached in a few days and followed by a collapse after a few days, XMR’s current price is only 53% lower than the second peak in 2021.

Another similarity with Polygon is the fact that the lowest price of Monero in 2022 hit in June, and it has practically risen for more than six months since then.

The difference, however, is that since then the gain turns out to be only 35%, which gives a very good understanding of how the price of XMR is actually much less volatile than that of many other cryptocurrencies, except for occasional spikes that form for a short period of time and disappear just as quickly.