- LOOM has recently dominated discussions in crypto circles.
- The asset has enjoyed a meteoric price gain in the past 30 days.
- This article explores the project and the reasons for its recent rise.
Ever so often in the crypto space, a new token creates significant buzz by printing mouth-watering gains while major assets barely move. In 2023, the most popular one is PEPE, which turned early investors into millionaires in just a few days.
However, as the year inches to a close, there might be a new challenger. LOOM, a relatively obscure token initially launched in 2018, has dominated discussions in crypto circles in the past few days amid an eye-grabbing 518% rise in the past 30 days.
In this article, we explore what LOOM is and the reason behind its meteoric rise amid relatively quiet market conditions.
What Is LOOM?
LOOM, not to be confused with Loom (a video messaging platform), is the native token of Basechain (not to be confused with Coinbase‘s Base Chain), an interoperable Delegated Proof-of-Stake (DPoS) blockchain. LOOM holders stake their tokens to secure Basechain and earn rewards.
Sponsored
Developers also use the token on the Loom Network platform to pay hosting fees for their decentralized applications (DApps). The Loom Network platform provides developers the tools to build and scale decentralized applications (DApps) that are interoperable with Ethereum, Bitcoin, Tron, and Binance Chain network assets.
LOOM was initially released in 2018, with an initial supply of 1 billion tokens, which raises the question of why there is sudden attention now.
Why LOOM is up Over 500%
Amid quiet market conditions, crypto traders with an appetite for risk and capital to spare often get bored and look for relatively unknown assets they can gamble on. In the latest instance, this appears to be LOOM.
Sponsored
As several market observers have highlighted, behind LOOM’s rise is significant volume from South Korean traders, who are infamous for their speculative appetite in crypto circles.
At the same time, news of exchange listings also appears to fuel excitement. Most recently, Binance announced the asset’s listing on its futures platform with up to 10 times leverage.
At the time of writing, the asset is trading at $0.2654, representing an impressive 24.55% gain in the last 24 hours alone, per CoinMarketCap data. Despite these impressive numbers, there are reasons for investors to exercise caution before investing in LOOM.
Is LOOM a Pump and Dump?
Amid LOOM’s rise, there are some red flags that prospective investors should be aware of. For one, as highlighted by crypto smart money tracker Lookonchain, 50% of the token supply is held by a single wallet, which increases the chances of price manipulation and a rug pull.
Additionally, according to on-chain analyst “The Data Nerd,” wallets associated with Loom Network have sent 7.15 million LOOM (worth $2.03 million) to Binance, suggesting that team members may be dumping on investors. These factors, combined with the penchant of South Korean traders to engage in pump-and-dump schemes, do not bode well for LOOM’s long-term prospects.
On the Flipside
- LOOM is not associated with Loom, the video messaging platform that recently sold for $1 billion.
- Price rallies like the one experienced by LOOM in the past 30 days are rarely sustainable.
Why This Matters
With a lot of discussion surrounding LOOM, it is necessary to understand the fundamentals of the project and the activity driving its recent meteoric rise.
Read this to learn how to stay safe during high periods of speculation:
PEPE Coin Case Study: How to Stay Safe in Meme Coin Mania
Learn more about how the defense is struggling in the SBF trial:
SBF’s Defense Appalls Judge With Fumbling of Ellison Cross
