Why Cosmos’ ATOM cryptocurrency is climbing

What happened

Cosmos (CRYPTO: ATOM) recently announced the launch of a new blockchain network, and its ATOM cryptocurrency token is increasing accordingly. ATOM was up about 6.1% in the previous 24 hours at 4:45 p.m. EDT.

The Cosmos team announced on October 19 that it would launch a new blockchain called Sagan. The new blockchain network, named after astronomer Carl Sagan, will be used for application testing and experimentation.

Image source: Getty Images.

So what

Cosmos hasn’t shared much information about Sagan. The new blockchain network was teased at the end of a conference hosted by the team, and investors and developers are still largely in the dark about the details. While not much is known about the upcoming blockchain, its announcement points to a new use case for Cosmos’ ATOM token.

Cosmos’ current core service is to allow users and developers to exchange and integrate data across decentralized blockchains, and the ATOM token is to pay for the cost of these applications and activities and maintain the network. Sagan’s first teaser suggested that the team’s new blockchain would be used as a testing ground for features and applications, and ATOM could play a similar role on the new network.

Now what

The crypto market has exploded this year amid growing interest in blockchain-based applications and services. Growing concerns about inflation and stock market volatility have also prompted investment dollars to invest in the cryptocurrency space, and Cosmos and its ATOM token have benefited from this variety of favorable winds.

If blockchain applications continue to gain traction, Cosmos’ ability to allow users to share data across networks and test applications could help fuel increased demand for the ATOM token. However, keep in mind that the crypto market tends to be volatile and ATOM remains a high risk investment.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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About Tommy Dodd

Tommy Dodd

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