Disclaimer: The datasets shared in the following article have been compiled from a set of online resources and do not reflect AMBCrypto’s own research on the subject
VeChain is a flexible enterprise-grade L1 smart contract platform with a native crypto – VET. VeChain started out in 2015 as a private consortium chain, collaborating with a variety of businesses to investigate blockchain applications. With the ERC-20 token VEN, VeChain would start its shift to a public blockchain in 2017. In 2018, it would launch its own mainnet under the ticker VET.
Since the beginning of 2022, VET has been on a steady downtrend. This decline can be attributed to the crypto-winter. At press time, the altcoin was trading at $0.023, up by 2.25% over the last 7 days. The market capitalization was $1.69 billion.
At the time of writing, the developing candle on the charts demonstrated that despite the bulls’ efforts to drive the price of the VET high, it has not yet managed to close above recent short-term highs.
The declining candles and the movements of the MACD and Signal lines all indicated neutral price activity. When VET’s price breaks the trend line and closes above it, it may go towards $0.026. If so, the crypto may move even farther in the direction of the $0.034-resistance level.
VET’s price had been rising quickly prior to the onset of the crypto-winter as it gained popularity among businesses and developers. As more companies utilize VeChain for supply chain management and other applications, demand is anticipated to rise. And this is why expectations are still high from the token.
In this article, we will analyze what drives the price of VET and what factors affect the altcoin’s price.
About the platform
VeChain is a blockchain platform that enables companies to create decentralized applications (dApps) and carry out transactions with higher levels of security and transparency. VeChain intends to address the issues of counterfeiting, supply chain management, and data integrity with its blockchain-based solutions. VeChain gives businesses a tamper-proof solution and increases consumer transparency by enabling them to trace their goods and assets on the blockchain.
VeChain’s platform, which enables companies to introduce their own digital tokens and raise money through initial coin offerings, is arguably its most distinctive feature. Due to its adaptability, VeChain is a desirable choice for companies wishing to optimize their supply chains and participate in the booming crypto asset market. VeChain is in a good position to continue growing in the years to come because of its robust team of partners and advisers.
DNV GL, a provider of audit and certification services for ships and offshore structures, partnered with VeChain in January 2018 to provide audits, data collecting, and a digital assurance solution for the food and beverage sector.
Apart from this, PriceWaterhouseCoopers (PwC), a large auditing and consulting business, has teamed up with VeChain since May 2017 to provide its clients with greater product verification and traceability.
Additionally, starting April 2020, VeChain has been used by H&M, the Luxury Fashion Brand, the second-largest clothes retailer in the world with more than 5000 stores.
However, things are not turning around so well for the token. The price of VeChain dropped to its lowest level in the last twelve months with the outbreak of the Russia-Ukraine 2022 war. As is common with cryptocurrencies, it began to recover the very next day. Many traders are now unsure if it would be wise to invest in this currency at this time as a result of this.
If this applies to you, you might want to find out more information before deciding whether or not to purchase it.
If this trend persists, VeChain might easily reach $1 within the next few years or even more. Anything might happen in the cryptocurrency market, so this is by no means a guarantee. However, VeChain appears to be positioned for long-term growth, and $1 seems like a reachable goal in the foreseeable future.
Source: VeChainstats
In fact, data from VeChain Stats revealed a troubling decline in its mainnet activity.
Although there has been a visible spike in activity since the beginning of August, one cannot ignore the difference compared to last year where the network was seeing over 2 million clauses a week. Unlike many other cryptocurrencies, VeChain’s price and its mainnet activity started declining since the beginning of 2022. The market wide sell-off following the collapse of Terra did impact VeChain’s mainnet activity, but as the chart indicates, it has pretty much recovered to pre-bear market levels.
Additionally, data procured by SeeVeChain suggested that VeChain Thor transactions have been on a steady decline too. The daily burn rate of VETHO, the token required for facilitating VET transactions, can be seen consistently falling – A sign of diminishing VET transactions.
However, since the beginning of August, the daily burn rate has been setting higher highs, while moving in a sideways direction. This may suggest recovery and stabilization to some extent.
Source: See VeChain
VeChain was in the news back in May 2022, when it offered Terra LUNA developers grants of upto $30,000 to migrate their layer 1 chains to VeChain following the collapse of terra.
There was a brief rebound in VET’s price towards the end of the first quarter of 2022. The token surged all the way to $0.089 following the announcement of VeChain’s partnership with Draper University which entailed a fellowship and a Web3 accelerator program. However, May’s market-wide crash sent VET’s price tumbling down to $0.024. The price failed to recover from the bearish trend, despite news of a new partnership with Amazon Web Services and the Q1 financial report from the VeChain Foundation which showed a healthy balance sheet.
In 2020, PwC estimated that blockchain technologies could boost the global GDP by $1.76 trillion by 2030 through improved tracking and tracing. PwC’s economic analysis and industry research showed that tracking and tracing of products and services has an economic potential of $962 billion. Investors will be eager to see how PwC’s blockchain partner VeChain benefits from this.
Global market intelligence firm IDC released a report in 2020. According to the same, 10% of the supply chain transactions in Chinese markets will use blockchain by 2025. This could work out in favor of VeChain, with it being the leading blockchain firm catering to supply chain solutions and given its significant presence in China. James Wester, research director at Worldwide Blockchain Strategies IDC noted,
“This is an important time in the blockchain market as enterprises across markets and industries continue to increase their investment in the technology. The pandemic highlighted the need for more resilient, more transparent supply chains”
According to a report published by ResearchandMarkets.com, the global supply chain management market size is projected to hit $42.46 billion by 2027, with a Compound Annual Growth Rate (CAGR) of 10.4% from 2021 to 2027. Experts have indicated major opportunities for integration of blockchain technology in supply chain management software in the projected period. As the leading blockchain firm catering to supply chain management, VeChain could stand to gain from this.
It was reported in July that VeChain will be rolling out a solution for luxury brands that often find their cheap knock-offs being illegally sold in the primary and secondary market. VeChain will implant its proprietary chipset in luxury products which will help manufacturers keep track of their inventory and monitor sales in real time on the blockchain. In addition to that, customers will be able to verify the authenticity of their purchased product using a mobile application. The application would also provide additional info such as carbon emission associated with their purchase and the story behind their product.
A paper published by The Institution of Engineering and Technology, outlined blockchain applications for the healthcare industry. The paper explained how start-up companies in this industry were exploring the use of blockchain technology for clinical data management. The paper went on to cite the example of the Mediterranean Hospital in Cyprus, which leveraged E-HCert, a data management application based on VeChain Thor.
On 10 August, VeChain and OrionOne, a global logistics tech firm, announced an integration partnership. The joint venture aims to combine the VeChain ToolChain with Orion’s best-in-class logistics platform to offer clients an efficient and effective pathway to leverage blockchain technology in their business without spending a ton on network infrastructure. Tommy Stephenson, CEO of OrionOne, while speaking on this new partnership remarked, “When it comes to blockchain and supply chain, there’s only one game in town, and that’s VeChain. No other entity can compete with their low-cost, rapid deployment, and ease of use.”
On 19 August, the VeChain Foundation announced via twitter that the VeChainThor public testnet had been successfully updated to accommodate VIP-220, also known as the Finality with One Bit (FOB). The update implements a finality gadget which allows the network to run dual modes of consensus, the Nakamoto and Byzantine Fault Tolerance (BFT) consensus, at the same time. This move saved VeChain the trouble of completely replacing their proof-of-authority consensus mechanism. A finality gadget helps blockchains execute transactions optimistically and only commit them after they have been sufficiently validated.
Developers have clarified that FOB has an edge over the existing finality gadgets which follow the view based model of Byzantine Fault Tolerance (BFT) Algorithms, because nodes in FOB are less likely to be affected by network failure.
The update will also help VeChain reduce the complexity of their current proof-of-work consensus protocol, thus minimizing the potential risks caused by unknown implementation bugs, in addition to sustaining the usability and robustness of the network.
Earlier in June, VeChain had described block finality as “an indispensable property for a modern blockchain system because it provides an absolute security guarantee for blocks that satisfy certain conditions.”
The VeChain Foundation informed its community on Twitter that from 5 September onwards, the network will be suspending $VEN TO $VET token swaps. The function is expected to resume after the Ethereum network stabilizes following the much-anticipated merge slated for mid-September.
Earlier this month, VeChain announced that it had entered into a strategic partnership with TruTrace Technologies, a blockchain development company catering to the legal cannabis, food, apparel and pharmaceutical industries. The partnership aims to integrate complementary technologies, and offer TruTrace’s clients enhanced traceability by leveraging VeChain’s seamless infrastructure.
Source: VET/USD, TradingView
The price of VET has been on a downtrend since April this year. It is clear from the VET/USD chart that ever since VET dropped below $0.039 in May this year, it has faced major resistance at the $0.034-level. The crypto moved sideways in a ranging pattern between mid-June and July with key support at the $0.021-level. Towards the beginning of August, the pair finally broke the three-week long resistance at the $0.027-level and rallied 24% all the way up to $0.034 by 13 August.
The price has since, however, dipped back down to $0.023, which may also emerge as a new support level, although one can only be sure after a couple more retests. It is unlikely that the price of VET will go back to what it was trading for before the market wide sell-off in May.
VeChain Tokenomics
Token minting predates VeChain’s rebranding, thus, figures have been converted from VEN to VET.
VeChain initially minted 100 billion VET which was distributed in the following manner –
- 22 billion VET were retained by the VeChain Foundation
- 5 billion VET were given to project team members
- 23 billion VET went towards enterprise investors
- 9 billion VET went towards private investors
- 27.7 billion VET were sold in the crowdsale
- 13.3 billion VET were burned by the VeChain Foundation as part of the token sale refund process
VET Price Prediction for 2025
Crypto-experts at Changelly have projected VET to be worth at least $0.10 in 2025. They believe the maximum it could go to is $0.12.
Data gathered by Nasdaq suggests that the average projection for VET in 2025 is $0.22.
According to data published on Medium, however, the average projection for VET in 2025 is $0.09.
VET Price Prediction for 2030
Changelly’s crypto experts have concluded from their analysis that VET should be worth at least $0.64 in 2030. The projection included a maximum price of $0.79.
Data gathered by Currency.com suggests that the average price of VET in 2030 should be $0.38.
The experts at Medium predict VET to be worth an ambitious $1.79 by the end of the decade. Considering the current price, that would amount to a whopping 6200% profit.
Conclusion
It is important to note that increased adoption of VeChain doesn’t necessarily translate to increased demand for VET since the token is primarily used for staking and governance.
VeChain is arguably the only blockchain in the supply chain vertical that has survived the test of time. Rival tokens like Waltonchain and Wabi have seen their market capitalization and volume dramatically diminish over the past few months.
The ongoing supply chain crisis would have been a very good opportunity for VeChain to demonstrate its capabilities but companies all over the world have been resorting to conventional systems rather than exploring an innovative blockchain solution like VeChain. That being said, the supply chain tracking industry is ripe for disruption and VeChain is in a position to dominate the space in the near future.
Critics have speculated that while VeChain’s blockchain may prove useful, the specific nature of its native token’s utility i.e. pertaining to the business world, may become a hindrance in its growth.
VeChain needs to focus on what it’s good at – Enterprise-facing blockchain solutions for logistics and supply chains.
The major factors that will influence VET’s price in the coming years are –
- Increase in demand for VET through growth in dApp activity
- Development of VeChain cross-chain
- Stable economic environment in China
- New partnerships with companies in the supply chain industry.
- Development of new use cases for VET
In other news, the Fear and Greed Index improved briefly in early August, before slumping back again as the market fell.
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