Where could the price of XEM be headed and why?
New Economy Movement (NEM) is a platform that aims to provide a customisable blockchain solution to businesses. The native token of the NEM ecosystem, XEM, is one of the world’s top 20 cryptocurrencies by market cap at the time of writing.
XEM experienced substantial volatility in 2017, trading between a low of US$0.0036 and a high of $US2.01. So, are those fluctuations expected to continue, or is there something else in store for the XEM price in the weeks and months ahead?
To find out, let’s examine the many factors that influence the value of the XEM token.
|Coin name||XEM token|
|Mineable||No (the NEM system uses a process known as harvesting)|
|Launch date||31 March 2015|
XEM price prediction
To get an accurate idea of how the price of any digital currency may change in the future, we need to carefully assess the many issues that can influence its price. Cryptocurrencies are complicated and volatile, and there are a host of factors that could drive prices up or down.
If you’re thinking of buying XEM, consider the effect the following factors could have on its price.
What could drive XEM’s growth?
- Catapult update. Originally written in Java, at the time of writing (12/03/2018) NEM is being rewritten in C++ as part of the “Catapult” update, which is scheduled for release at some stage in 2018. Its main focus is on improving transaction speed, but you can find more details of its features below.
- Real-world application. NEM’s technology has already been put to use in the Mijin commercial blockchain, which has been used by financial institutions in Japan and around the world.
- Use cases. From payments and transfers to logistics solutions, record keeping and voting systems, there are plenty of potential real-world use cases for the NEM ecosystem that could encourage the widespread adoption of the platform. Check out some examples of these use cases on the NEM website.
- Projects built on NEM. A key factor that determines NEM’s success will be the number of businesses and entities that build projects on the NEM platform. The more successful and innovative projects there are, the greater the demand for the XEM token could be.
- NEM.io Foundation. NEM is backed by the NEM.io Foundation, a non-profit organisation based in Singapore. Its sole purpose is to “introduce, educate, and promote the use of the NEM blockchain technology platform on an international scale to all industries and institutions”. One example of the foundation’s work was its announcement of a US$70 million investment fund to power the development of local blockchain companies.
What could hold XEM back?
- Lack of adoption. One key factor that will determine the value of XEM will be its ability to achieve widespread adoption. If it’s unable to attract a sufficient number of corporate entities and developers to create projects on its platform, this will impact on the value of XEM.
- Competition. NEM will also need to compete with a range of other projects focused on smart contracts, smart assets and blockchain solutions for business. Some competitors to keep an eye on include names like Ethereum (ETH), Neo (NEO) and Ardor (ARDR).
- Hacking. When Japanese cryptocurrency exchange CoinCheck has hacked in January 2018, 523 million NEM were stolen through several unauthorised transactions. NEM announced that it was tracking the stolen coins, but its association with this widely publicised hack could hamper public perceptions of the project.
- Catapult delays. Originally scheduled to be released in 2017, Catapult has not been launched at the time of writing. While it’s obviously vital for the development team to ensure that the update is successful, further delays could dent consumer confidence in NEM.
Where to buy XEMRead our step-by-step guide to find out more about buying NEM
What’s coming up in NEM’s roadmap
NEM doesn’t offer an official roadmap with goals and milestones for the year ahead. However, the biggest development currently in the works is the Catapult update, which is due to be released at some stage in 2018.
The Catapult whitepaper outlines the features this update will introduce, including:
- High scalability using a design based on the tiered web architecture commonly found in enterprise computing.
- The introduction of a high-performance and highly scalable API gateway server layer with an open integration architecture.
- High-speed messaging.
- An embedded escrow service for exchange of assets on the blockchain.
- Transaction rates in excess of 3,000 per second.
- Interoperability so that external decentralised or centralised applications or smart contracts can transact using the blockchain.
According to the whitepaper, “The end objective is a high performing, secure enterprise-class solution with open connectivity.”
The value of XEM could also be influenced (either positively or negatively) by how NEM stacks up against its competitors. Key projects that could battle NEM for market share include:
- Ardor (ARDR). Based on Nxt, Ardor is a scalable blockchain-as-a-service platform that allows companies to build their products and services using child chains.
- Ethereum (ETH). An open-source platform that allows developers to build and deploy decentralised applications (dapps), Ethereum is a major player in the world of digital currency and the second largest cryptocurrency by market cap.
- NEO (NEO). Often dubbed the “Ethereum of China”, NEO is a blockchain platform for the development of digital assets and smart contracts. It’s also one of the world’s top 10 cryptocurrencies by market cap.
- Stratis (STRAT). An enterprise-grade framework designed to allow companies to integrate blockchain technology into new or existing systems, Stratis aims to offer a customisable blockchain solution.
- Waves (WAVES). Waves allows users to issue their own cryptocurrencies and build applications on a custom blockchain.
Beyond 2021: What does the future hold for NEM?
Due to the volatile and complicated nature of cryptocurrencies, it’s hard to predict future price rises or falls with any certainty. For NEM and its native XEM token, there certainly appears to be plenty of potential. With a wide range of real-world use cases and the backing of the NEM.io Foundation, NEM has the opportunity to be at the forefront of the large-scale integration of blockchain into the business world.
However, there are a couple of key obstacles that will need to be overcome if this success is to be achieved. The first is the simple fact that NEM is operating in a highly competitive space and there are several other solidly-backed projects battling for a slice of the pie. Whether NEM has the technology and the business model to outperform its competitors is as yet uncertain.
The second challenge is the eagerly anticipated launch of the Catapult update. If successful, the features it offers could offer a significant improvement to the performance of the platform. However, when the update will be released to the public remains unclear.
Should you buy XEM? You’re the only person who can answer that question. Cryptocurrencies are complex beasts, and there are many internal and external factors that influence their price fluctuations.
Research the technology behind the NEM platform and its potential use cases, as well as the market competition and other challenges it will face, so that you can make an informed decision.
At the time of writing, the author holds IOTA and XLM.