One of the best performing cryptocurrencies in the world this year was Conflux (CFX). Dubbed the Chinese coin, CFX is up an incredible 1,800 percent this year and is now very close to making it into the top 50 cryptocurrencies by market cap. Trading at a price of just $0.45, Conflux is currently the 51st largest cryptocurrency with a total market cap of $1.1 billion. So, should investors buy CFX right now? Here is the answer, according to Dominic Basulto, an analyst at US-based financial firm The Motley Fool…
This Chinese coin is in the focus of investors: Why?
Why are investors crazy about Conflux? After all, Conflux is not a metaverse or AI coin. But while Conflux wasn’t used as leverage for one of these popular tech trends, it became popular with the rise of Chinese coins. In short, Conflux is a popular Chinese blockchain project, which comes with a unique set of risks and rewards. It is worth noting that Conflux is thought of as China’s answer to Ethereum (ETH). This makes it valuable for developers and technologists looking to build the Blockchain economy in China. Conflux was first launched at Tsinghua University in Beijing, often referred to as “China’s MIT”.
As a result, the Turing Prize winner in 2000, the computerized version of the Nobel Prize, Dr. There are many smart people behind this project, including Andrew Yao. The Conflux team claims to have a different Blockchain consensus mechanism: it’s called the Tree-Graph, which is much more powerful and efficient than other consensus mechanisms like Ethereum’s proof-of-stake mechanism.
What is the real reason for the ascension?
However, the real reason Conflux has skyrocketed is because it has so quickly become a “public blockchain” in China. In practical terms, this means that it has the approval of the Chinese government, which is extremely important. Conflux can continue to thrive and work with top Chinese tech companies without excessive government interference. For example, as we reported as Kriptokoin.com, Conflux has signed an agreement with China Telecom for Blockchain-based SIM cards. He also signed a deal for NFTs with Xiaohongshu or “China’s Instagram” Little Red Book.
So it’s easy to see why there is so much momentum and excitement around Conflux. According to the analyst, this may just be a “decade investment opportunity”. “You can invest in a Chinese blockchain leader at a time when no one has heard of it and is trading under $1,” the analyst says. Also, Conflux says they will be a bridge between East and West and enable collaboration and interoperability of Blockchain projects all over the world. So the potential growth opportunity for Conflux is not limited to China.
There are geopolitical and regulatory risks
But the source of this crypto’s greatest reward is also the source of its greatest risk. It’s impossible to talk about Conflux without mentioning China, and that’s a problem. There is a crisis erupting in Taiwan, and if this turns into a full-blown war, it could be game over for all investment opportunities with China. There’s also something about Chinese tech companies that the US government doesn’t like. The US government accused China’s largest 5G telecom company, Huawei Technologies, of being the front of the Chinese Communist Party. The analyst uses the following statements:
If you decide to invest in Conflux, regulatory risk is something you should consider. Currently, Conflux is not on the radar of US regulators, but on the radar of Chinese cryptocurrency exchange Binance. From my perspective, it’s clear that there will be any Chinese crypto or blockchain project trying to expand into the US market.
A buying opportunity for the Chinese coin?
So the big positive factor for Conflux, according to the analyst, is “access to China’s blockchain growth”. But the big downside is the potential geopolitical and regulatory risk involved. “From my point of view, if the regulators decide to go after it, the positive factors aren’t worth the risk of your asset falling to zero,” the analyst says. It also uses the following expressions:
Investing in Conflux in the short term is attractive. What other cryptocurrency can deliver tenfold returns in a few months? But it’s important to keep the long-term story in mind here: For any serious amount of money, I would rather invest in Ethereum and put all my faith in Vitalik Buterin and his team to stay one step ahead of any new Blockchain innovation coming out of China.
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