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Uniswap’s fall and rise: what is the future of UNI?

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Since Uniswap’s listing on Robinhood on the 14th of July, the UNI token experienced a surge soon after a decrease in value. Before this, the token traded over 84% below its all-time highest value, $44.97. But by the 18th of July, UNI’s value increased by 15% to $7.32.

Now investors are wondering, is the future of UNI secured, or will the token still experience major crashes?

What is Uniswap (UNI)?

UNI is a token created by Uniswap, the largest decentralized exchange by trading volume. Uniswap is one of the top three DeFi projects, just behind AVAX and DAI, with a market cap of $5.3 billion.

Uniswap is a DEX built on the Ethereum blockchain. It used a peer-to-peer trading system that uses Ethereum-based smart contracts without needing trusted intermediaries. Furthermore, the platform is autonomous, self-contained, and encrypted.

UNI acts as the utility and governance token for the Uniswap network. Those who own the UNI token can vote on different proposals and receive staking rewards related to the platform.

What made the Uniswap price drop?

Many cryptocurrencies experienced price drops in 2022 because of the market crash that caused ‘crypto winter.’ The UNI token was not exempted from this, as the price fell by 81%, from $17.81 in January to $3.37 in June, its all-time low.

But after the news that UNI is listed on Robinhood, the price significantly increased. The token began trading at $7.32, with a market capitalization of $5.37 billion. This made it the 17th largest cryptocurrency by market cap.

Although the Robinhood listing benefited the UNI token, some experts say it does not guarantee a bullish increase in the long run. Investors have gained about 20% on the price increase in the past week, but investors should expect another crash after this.

UNI may experience a 45% crash

According to an expert at Coin Telegraph, the UNI might experience a 45% price crash in the future. The token’s price has been increasing since mid-June in a rising wedge pattern, which analysts describe as a reversal.

Once the price goes below the lower trendline, the rising edge will be resolved. Based on this concept, the listing on Robinhood only offers a temporary effect, as the price might drop in the future. By September 2022, the price might fall back to $3.8 on average.

If you refer to the Shiba Inu case, you will see that getting a Robinhood listing does not guarantee a long-term bull run for a crypto token. SHB has crashed by about 60% since its listing so the UNI token might follow this same pattern.

Price drivers of Uniswap

Different factors determine the value of UNI, especially since Uniswap has achieved various milestones this year. The listing on Robinhood is one of them, but there are other factors to keep in mind when predicting its price increase.

Acquisition of genie

Uniswap acquired Genie in June 2022. This is the first NFT marketplace aggregator, allowing people to find and trade NFTs on various platforms. The acquisition of Genie is expected to benefit its value in the future.

Uniswap lab ventures launch

In April 2022, Uniswap founded the Uniswap Lab Ventures. The Lab Ventures was established to invest in different kinds of teams on the web3 stack, regardless of their tiers and segments. These include infrastructure, consumer-facing apps, and developer tools.

When Uniswap Lab Ventures was launched, Uniswap also invested in 11 projects and different native protocols on the web3 ecosystem.

V3 liquidity

In May 2022, Uniswap provided more liquidity to different ETH pairs on its platform than other centralized exchanges. These include ETH/USB and ETH/BTC.

For the ETH/BTC pair, Uniswap provided three times more liquidity than Binance and four and a half times more than Coinbase. Then, for the ETH/USD pair, Uniswap added two times more liquidity than these centralized exchanges.

Uniswap provided three times as much liquidity as other exchanges for the ETH/mid-cap pairs. This made it easier to execute larger trades on the centralized exchange and contributed to its price value.

Uniswap V3 deployed on Polygon

Uniswap V3 added Polygon (MATIC) as its fourth supported chain in January 2022. This is expected to affect its growth ad user experience positively. This was after they supported Ethereum, Optimism, and Arbitrum.

All of these milestones took place in 2022, and the listing on Robinhood seems to be the icing on the cake that benefited the value of the UNI token.

Should you invest in UNI?

Uniswap is the largest DEX platform, making the UNI a good fit for your trading portfolio. Although UNI is not recommended for a long-term investment option, it is best to carry out your research and see when the price will increase or decrease.

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