Known as the “Chinese Ethereum”, NEO is a leading cryptocurrency and blockchain platform for building decentralised applications (Dapps). It seeks to achieve a smart economy through smart contracts, digital identity and digital assets. These aspects are all integrated through blockchain technology for the desired smart economy.
In 2021, the crypto market was on a sustained bull run lasting from April 2020. The crypto economy had become so strong attracting investors looking for traditional stocks. NEO in the process also gained. It started at around $13 in January and ended the year at $23. It then kept the bullish run to hit $122 in May.
Fast forward to the mid-third quarter, NEO still maintains the high gains currency trading at $45.30. Here are some of the drivers of the NEO cryptocurrency price changes for the rest of the year.
What factors drive NEO prices in 2021?
Here are some of the factors that impact NEO cryptocurrency price in 2021;
Chinese government regulations
Due to its moniker of “Chinese Ethereum”, the Chinese crypto regulations impact its value. That is already evident in the recent Chinese crypto crackdowns. Before China banned cryptocurrencies, NEO was high performing with values of over $100. However, the clampdown on cryptos has negatively impacted it.
The coin had relied on the Chinese government support, with Chinese nationals as the major users. With the lack of crypto access for Chinese users, NEO becomes one of the most affected cryptocurrencies.
Competition
Even though various cryptocurrencies support smart contracts, Ethereum remains NEO’s biggest competition. Even though NEO has performed well over the years, Ethereum keeps its place as the most valuable altcoin.
Ethereum also currently has better prospects as it attracts banks and other institutional investors due to the ETH2.O upgrade. NEO had earlier upgraded its testnet to the RC2 version, however, results won’t be impactful following the Chinese regulations disruption. Ethereum might just have come right in time to take up the new launch momentum.
Hard-capped supply
Like any other market, the crypto market is subject to the laws of demand and supply. The more the demand for the token goes up with a limited supply, the higher the price rises. NEO has a supply cap of 100 million. No matter how much the demand increases, no more coins can be supplied.
NEO tokens were all pre-mined at the Genesis event. This limited supply will work for it as the demand will grow with the crypto market correction.
NEO price prediction 2021
NEO price prediction 2021 is on a sideways run that will turn bullish. The coin will gain value as the crypto market corrects. Most traditional financial institutions are looking to start using smart contracts. Those who won’t use Ethereum will opt for NEO. However, the changes will not be too much for the prices to hit the previous high levels topping $100.
Therefore, the NEO price prediction 2021 is for it to reach $49 by the start of January 2021.