Decentralized Exchanges (DEXes) are vital a part of the blockchain trade. In contrast to centralized ones like Coinbase and Binance, these exchanges are managed by the neighborhood. Additionally they used good contracts, which makes them fairly secure. This text will take a look at GMX, one of many largest DEX for buying and selling perpetual futures merchandise.
What’s GMX?
GMX is an organization that gives a decentralized perpetual futures buying and selling platform. It permits individuals to commerce hundreds of cryptocurrency belongings with low charges. Because of this, it is likely one of the largest gamers in the trade.
In line with its web site, GMX has dealt with cryptocurrencies value over $146 billion in its lifetime. Greater than 338k brokers have additionally used it from around the globe who love its easy-to-use platform, low transaction prices, and fast execution speeds.
GMX makes use of two common good contract platforms: Avalanche and Arbitrum. Avalanche is a layer 1 community that’s identified for fast speeds and low prices whereas Arbitrum is the largest layer-2 platform in the world. It supercharges the Ethereum community by making a sidechain that handles transactions individually from the community.
GMX operates in one of the crucial aggressive areas in the blockchain trade. It competes with different common networks like dYdX, Uniswap, Curve, and Apex Protocol. Additionally, it competes with centralized exchanges like Binance, Bybit, OKX, Bitget, and Kraken.
What’s the GMX token?
GMX token acts because the utility and governance token for the ecosystem. Holders obtain 30% of the full charges that the community generates. In line with the web site, Arbitrum customers make an APR of 5.5% whereas these on Avalanche make 5.78%.
The opposite two smaller tokens are GLP and GM. GLP is the liquidity supplier for the GMX V1 markets, which accrues 70% of the charges generated there. On the time of writing, the Arbitrum and Avalanche APR’s was 25.53% and 12.14%, respectively.
GM, however, is the liquidity supplier token for GMX V2 markets. It makes 63% of the full charges generated in GMX V2.
GMX, the largest token in the ecosystem, has a complete worth locked (TVL) of greater than $420 million. Its most circulation provide of 9.5 million tokens whereas these in circulation now stands at over 9.1 million.
What strikes the GMX token value?
There are a number of elements that transfer the worth of GMX. First, like different cryptocurrencies, it reacts to the broader market sentiment. It rises when traders are fairly grasping and falls when a way of concern is spreading in the market.
For instance, GMX token value surged in 2021 when most cryptocurrencies have been rising. It then entered a chronic crypto winter in 2022 as digital currencies and shares tumbled.
Second, GMX token reacts to the general motion of Bitcoin, the largest cryptocurrency in the world. When Bitcoin value rise, different altcoins rise as properly. And after they rise, GMX’s buying and selling platform sees extra exercise, resulting in greater staking charges.
Third, it additionally strikes in response to macro elements. In most durations, GMX rises when the Federal Reserve turns dovish and vice versa. For instance, it recoiled in 2022 because the Federal Reserve began climbing rates of interest.
There are different elements that impacts the worth of the GMX token. For instance, it’s affected by inner elements similar to platform upgrades, token unlocks, and regulatory points.
Is GMX a superb funding?
By October 2023, GMX was not a superb funding. The token initially jumped from a low of $25.25 in December 2022 and peaked at $92.20. At its peak, the coin was up by greater than 268% from the bottom stage on report.
As with different cryptocurrencies, GMX rally discovered intense promoting because the Fed hiked rates of interest. This lower noticed it backside under $30 in September 2023.
Nonetheless, there are three major catalysts that might push the GMX token value greater in the longer term. First, the continuing crackdown of centralized exchanges like Coinbase and Binance may draw extra individuals to decentralized exchanges like GMX.
Second, there are indicators that the American financial system is slowing whereas bond yields have surged currently. Due to this fact, there’s a chance that the Federal Reserve will pause charge hikes and probably resume slashing charges in 2024. Traditionally, cryptocurrencies like GMX and Bitcoin do properly when the Fed is reducing charges.
Lastly, Bitcoin will undergo its halving occasion in April 2024. Typically, Bitcoin tends to do properly forward of a halving occasion. Most crypto tokens do properly when Bitcoin is rising.
GMX value prediction
The every day chart reveals that the GMX token value fashioned a double-bottom sample between September and October 2023. In value motion evaluation, this is likely one of the most bullish indicators in the market. GMX has additionally jumped above the 50-day and 100-day shifting averages whereas the MACD has continued hovering.
Due to this fact, the outlook for GMX is bullish, with the following key stage to observe being $61.85, the very best swing on July 14th. This value is about 34% above the present stage.