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IMX: 4 Reasons Why Immutable X's Price Dropped

 


Immutable X price continued its bearish trend on Tuesday as part of the broader cryptocurrency sell-off. The IMX token is trading at $1.63, which is about 75% below its all-time high, which was set in January this year. Its market cap has plummeted to around $388 million, while its cryptocurrency ranking has dropped to 163. At its peak, it was among the 100 largest coins in the world.


What is Immutable X?

Immutable X is a Layer 2 platform aimed at topping up Ethereum-built non-fungible tokens (NFTs). It can be compared to other Layer 2 projects like Lopring and Polygon, with the only difference being that it focuses on NFTs. IMX is the native currency.


The goal of Immutable X is relatively simple. It is designed to speed up the performance of Ethereum’s NFTs. As a result, it helps reduce costs for buyers and increase their efficiency. In addition, Immutable is incredibly faster as it has a transaction per second (tps) of over 4,500, which is significantly higher than Ethereum's 18.


Another benefit of using Immutable X is that its network is much cleaner than Ethereum. It uses a proof-of-stake mechanism that allows new coins to be minted through validators.


The network has become popular among users in recent months. For example, the developers entered into a partnership with GameStop in January. The well-known video game retailer will use its network to mint and sell NFTs.


Why IMX falls

However, the IMX price has struggled in recent months. First, there are concerns about the state of the NFT industry. Some analysts believe that this industry will experience a slowdown in the coming years. When this slowdown occurs, industry-facing blockchain platforms will be impacted.


Second, there are fears that rising interest rates will crash risky assets like cryptocurrencies and NFTs. The Fed has signaled it will make about three to four rate hikes this year, while some analysts are expecting seven hikes. In this case, therefore, there is a chance that the price of Immutable X will struggle.


Third, the NFT industry is becoming incredibly competitive. While Ethereum is the leading player in the industry, other platforms like Avalanche and Solana are coming to market very quickly. As competition increases, Immutable X's market share will shrink.


Finally, Immutable X's price has plummeted due to rising tensions in Europe. These worries have helped drag other assets like stocks lower.

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