Should You (or Anyone Else) Buy Cronos (CRO)?

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Cronos’ decision to cut rewards put the cat among the doves.


Important points

  • Cronos is the native token for the Crypto.com platform and smart contract ecosystem.
  • The collapse in crypto prices and trading could pose challenges for Cronos.
  • The decision to buy crypto depends on your financial situation as well as your long-term belief in a project.

Cronos is the native token for popular crypto app and exchange Crypto.com. Its price, along with many cryptos, has surged over the past year with an increase of over 850%. This was partly due to the platform’s heavy promotional activity. For example, it bought the naming rights to the Staples Center — now the Crypto.com Arena. Matt Damon was also the face of a high-profile advertising campaign.

However, Cronos slipped from its position as a crypto darling in early May after arbitrarily cutting its staking rewards. Crypto.com quickly reversed the decision and announced much less drastic rewards overhauls. Nonetheless, the move has severely shaken investor confidence, as we will discuss in this article.

Cronos Basics

Cronos is a utility token for the Crypto.com platform. Users can get fee discounts by paying with CRO and also use the tokens to qualify for benefits. These include higher interest rates on deposits and better benefits on Crypto.com’s prepaid debit cards. The more CRO employed, the better the rewards.

  • Start date: 2018
  • Market Cap: $4.9 billion (CoinMarketCap, May 17).
  • Availability: Some major US cryptocurrency exchanges. Several crypto exchanges choose not to list competitor tokens.

Formerly known as Crypto.org Coin, Cronos was rebranded last year to reflect the fact that Crypto.com is more than a crypto exchange. It is also a programmable blockchain that hosts a wide ecosystem of applications. It’s one of several Ethereum (ETH) alternatives that have gained traction as developers look for less congested blockchains with lower costs. The Cronos smart contract blockchain works with both the Ethereum and Cosmos (ATOM) ecosystems.

should you buy it

Before buying crypto, you need to consider several factors: your financial situation, your investment strategy, and your belief in the potential of that particular project.

1. Your financial situation

The golden rule of crypto investing is to only spend money you can afford to lose. That way, if something goes wrong, your finances won’t completely derail. Also, prioritize goals that create long-term financial stability before buying crypto. For example, if you are trying to pay off debt or build an emergency fund, these should take precedence over cryptocurrency investments.

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2. How it fits with your investment strategy

Everyone has their own reasons for buying crypto. It is crucial that you understand the risks involved and how to minimize them. If you are unfamiliar with risky assets, crypto may not be for you.

It’s also important to be aware of how CRO might fit in with the rest of your crypto portfolio and your other investments. Crypto assets are high-risk and volatile investments, and there’s a lot we don’t know about how they will perform. Therefore, experts recommend investing only a small percentage of your total portfolio in crypto.

3. How Cronos might fare over the long term

Cronos has some important advantages. It’s a well-established smart contract platform that has already attracted a decent number of projects. And the Crypto.com exchange has been relatively successful in attracting crypto investors. However, the decision to change staking rewards earlier this year raises questions about how sustainable it all is.

Sure, the exchange did drastically shutting down the proposed changes, but there’s no guarantee it won’t try to change the staking benefits again later. CRO’s price could also fall six months from now if reduced premium rates actually take hold. There are also concerns as to why it decided to cut premiums. Some fear that Crypto.com has overstretched itself with high ad spend.

Keep in mind that the climate has turned more risk-off and some of the heat has lifted from the crypto industry, which could be a problem for crypto platforms. Other crypto exchanges like Coinbase are already slowing down their hiring efforts due to the plunge in trading volume. As an investor, it’s worth considering how the platform might weather a prolonged decline in both prices and crypto trading.

bottom line

Crypto.com and Cronos have a lot going for them as a crypto exchange and smart contract platform. However, despite strong promotional activities, it does not come out on top in any category. According to CoinMarketCap, Crypto.com is the 15th largest exchange in terms of trading volume. And DeFi Llama ranks Cronos seventh in terms of the amount of money on its platform.

As with any crypto, it’s important to do your own research to evaluate how it might perform over the long term. Areas to watch for Cronos include how it stacks up against the competition and what could happen if crypto continues to underperform.

The right mindset for investing in cryptocurrencies

Investing in crypto can be extremely risky. We believe investors should approach these assets like any other technology investment – with a long-term mindset and anticipation of ups and downs. The Fool recognizes there could be opportunities for investors. We actively recommend selected cryptocurrencies to our community. However, we recommend everyone to do their research before investing to understand the potential risks and rewards.

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