In a surprising turn of events, Kaspa, an altcoin that was relatively unknown, managed to capture the entire cryptocurrency market with an astounding surge of almost 200% in the initial week of November.
This has made the coin stand out as one of the best-performing cryptocurrencies of the year.
However, while the crypto community celebrated this exponential growth, critics have surfaced, questioning the foundation and sustainability of this surge.
Justin Bons, the founder of CyberCapital, drew attention to the underlying structural deficiencies within Kaspa.
According to Bons, Kaspa lacks several fundamental components for a cryptocurrency to justify its valuation. He noted the absence of Turing-complete smart contracts and a Proof of Stake (PoS) consensus mechanism as a primary weakness.
The absence of a PoS consensus mechanism, deemed energy-conservative and more secure across the crypto sphere, presents a drawback for Kaspa. Additionally, the lack of smart contracts reduces Kaspa to merely a scalable Layer 1 chain, a role Bitcoin has fulfilled despite not focusing primarily on scalability.
Bons highlighted the roadmap announced by Kaspa, emphasizing the intention to implement smart contracts through Layer 2 solutions.
However, he criticized this approach as inadequate, primarily due to the limitations imposed by the GhostDAG consensus algorithm, preventing the direct implementation of smart contracts within the Kaspa ecosystem.
It doesn't end here; concerns have also been expressed about the governance model of Kaspa's ecosystem. The absence of a structured governance system raises questions about the platform's decentralization and immutability.
Critics argue that the platform's purported democratic and community-driven ethos lacks the mechanisms for decentralized decision-making.
Kaspa's Price Resurgence and Future Projections
Despite some doubts about its underlying value, the price of Kaspa has remained resilient and is currently on an upward trend.
Currently, it's trading at $0.11475 and has seen an increase of over 2,200% in recent days, making up for some of the ground it lost during a previous market correction.
Technical analysis shows that bullish trends will continue, with indicators such as the Relative Strength Index and Moving Average Convergence Divergence pointing towards potential new all-time highs beyond $0.1437.
However, this bullish momentum faces potential threats from abrupt selling pressures, which could trigger a downturn towards $0.1200. Such a scenario could invalidate the optimistic outlook, plunging the price below $0.1000.
Kaspa Price Projections: Insights into 2024 and Beyond
Analysts and experts have different opinions about the possible price trajectory of Kaspa in 2024 and beyond.
DigitalCoinPrice predicts that there will be moderate growth, with a high of $0.35. On the other hand, WalletInvestor has a more conservative forecast, predicting a rise to $0.265.
The price prediction from other sources falls somewhere between estimates ranging from $0.2033 to $0.2441. These projections indicate some level of uncertainty surrounding the future valuation of Kaspa.
Moving further into 2025, projections from DigitalCoinPrice indicate a potential high of $0.51, while WalletInvestor predicts figures around $0.38. Price prediction ranges between $0.2886 and $0.3552, underlining long-term forecasts' volatility and speculative nature.
Insights from Experts and Technical Analysis
The announcement of Kaspa's inclusion on Binance Futures coincided with a considerable price surge, stimulating heightened expectations.
Analysts anticipate a continued upward trajectory, some even projecting a potential $1 valuation for Kaspa by 2030. However, these predictions are not without skepticism, as volatility remains a persistent characteristic of the cryptocurrency market.
Factors and Considerations Influencing Kaspa's Future
Several factors could shape Kaspa's future trajectory, including technological advancements and the adoption project's development roadmap.
While Kaspa's innovative security approach and scalability offer promise, the highly volatile nature of the crypto market presents risks and uncertainties.