We have seen the rise of lending and lending platforms, cryptocurrency exchanges, and even crypto insurance. Now it looks like cryptocurrency derivatives could be the next big thing, and projects like Synthetix are at the forefront of this exciting new development.
TICKER SYMBOL SNX
24H PRICE CHANGE -2.12%
7D PRICE CHANGE 1.24%
MARKET CAPITALIZATION $643,942,747.68
CIRCULATING SUPPLY 114,841,533,012
TRADING VOLUME $80,477,891.26
But is there a demand for cryptocurrency derivatives, and if so, how well positioned is Synthetix to help grow the market? In the following synthetic price prediction for 2025 and 2030, we will take a closer look at the idea of cryptocurrency derivatives and consider how Synthetix measures up as an investment opportunity in the coming years.
Table of Contents:
- What exactly are derivatives?
- Presentation of synthesizers
- Synthetix – An Overview
- How does Synthix work?
- Synthetix Network Token
- The Kwenta Exchange
- Looking at Synthetix Price History
- Synthetix (SNX) Price Predictions: 2025 – 2030
- Synthetix (SNX) Price Predictions for 2025
- How much will Synthetix (SNX) be worth in five years?
- Synthetix (SNX) Price Predictions for 2030
- Conclusion: Should you invest in Synthetix (SNX)?
WHAT EXACTLY ARE DERIVATIVES?
The idea of a derivative is nothing new and certainly not unique to cryptocurrency. Many of the most popular assets for retail trading are, in fact, some form of derivative. So what exactly are they?
A derivative is a contract linked to a real-world financial asset or instrument, and its value is based on the value of that financial asset or instrument. Effectively, these are contracts between two parties seeking to speculate on the underlying asset’s price movement, typically a buyer and a seller.
It’s important to note that a derivative is exactly that: it is derived from something. This means that when you buy and sell a derivative, you do not take ownership of the asset itself. Instead, what you are doing is entering into the contract described above.
A key advantage of derivatives is that they allow traders to speculate on an asset’s price movement in any direction: go long if they predict its value will rise and go short if they think it will fall.
PRESENTATION OF SYNTHESIZERS
We have taken a brief look at the concept of a derivative. In the world of cryptocurrencies, they are most often referred to as synthetic assets or synths. These act in a similar way to derivatives in the world of legacy finance, but instead of a contract creating a link to the underlying asset, a cryptocurrency token is created to represent this relationship.
This is an intriguing development, to say the least, as a synth pegged to almost any conceivable asset class or financial instrument can effectively be minted, meaning holders can gain exposure to virtually any global market and all from within the cryptosphere.
SYNTHETIX – AN OVERVIEW
The Synthetix project started life as Havven and was initially created to produce the stablecoin nUSD, launched in June 2018. However, just a few months later, the project was rebranded as Synthetix, now offering around 20 synthetic assets.
An Ethereum-based project, Synthetix, is a platform for minting ERC-20 tokens that track the price of another asset, effectively the derivative component as described above. Known as synths, these tokens can be created to represent almost any asset, as long as price data is available.
In addition to allowing users to create these Synths, the Synthetix platform also offers its proprietary decentralized exchange, Kwenta, where these tokens can be bought, sold, and traded just like derivatives with online brokers and exchanges. Then there is the Lyra platform, which is set up for buying and selling options, a form of derivatives.
HOW DOES SYNTHIX WORK?
For a synth to track a real-world asset, it needs a way to collect the relevant data. This is done through decentralized oracles, which effectively bridge the blockchain and the real world, allowing information from the outside world to be delivered in smart contracts. It is through oracles that price data or real-world assets are tracked. In the case of Synthetix, the oracles in question are delivered via Chainlink.
Once again, an important difference between Synths and other real-world asset-pegged tokens, such as stablecoins, is that Reserves do not back synths. Instead, highly complex mechanisms and smart contracts are what offer their value.
The inner workings of the platform are very complicated. Still, it is enough to understand that Synthetix uses two separate tokens as part of its protocol: SNX and Synthesizers, or sTokens. The mechanism between these tokens is not much different than stablecoins, and smart contracts are used to manage fees, inflation, collateral and staking for Synthetix to provide its services.
The Synths minted on Synthetix are ERC-20 tokens, which means you can use them in conjunction with many other DeFi projects, such as 1Inch and Curve, to provide liquidity, thereby earning interest.
SYNTHETIX NETWORK TOKEN
The synthetix network token – SNX – is integral to the Synthetix protocol. SNX is blocked from creating sTokens, such as sUSD. As noted above, this mechanism is very similar to stablecoin protocols such as MakerDao. The main difference is that SNX can act as collateral to create synths pegged to almost any type of asset, as detailed above.
Synthetix’s collateralization ratio stands at 600%. This means that if you want to create, say, $100 worth of sUSD, you need to stake SNX Tokens worth six times that value. This is how the platform keeps synths stable in the event of market turmoil.
SNX is also the platform’s governance token, meaning token holders can have a say in how the project is run and vote on major developments such as network upgrades or changes to the pricing structure.
THE KWENTA EXCHANGE
Another important part of the Synthetix platform is Kwenta, which is the exchange that allows users to trade synthesizers. Kwenta is a peer-to-peer protocol that eliminates the need for a middle man, with chainlink oracle data informing price feeds and generating exchange rates.
Users can buy and sell synths that represent other cryptocurrencies, such as Ethereum (sETH) and Bitcoin (sBTC); company stocks, including Tesla (sTSLA), Apple (sAAPL), and Netflix (sNFX); and even DeFi-based funds. Kwenta charges a variable fee between 0.3% and 1%, a proportion of which is rewarded to those who stake SNX on the protocol.
LOOKING AT SYNTHETIX PRICE HISTORY
Synthetix has been listed on major exchanges since March 2018. Perhaps understandably, there was little appetite for the project in the early stages, as this was when DeFi was very much in its infancy. SNX traded around $0.35 for the first few days before dipping below $0.15 for much of the rest of 2018.
Things were also no more exciting for SNX in the first half of 2019. While the token did experience periods of growth, the highest average trading price it achieved was roughly $0.30. However, things picked up a bit in the second half of the year, and Synthetic saw its first notable price increase in November, reaching a price of $1.52, a growth of over 4200% on its price at the beginning of the year.
SNX held some of that value throughout 2020 and traded consistently above the $1 mark before a slowdown during the second quarter sent its price down between $0.50 and $0.70. However, in June, the token was impressively bullish. It reached $2 in early July and, by September 1, had shot up to an average of $7.43.
An interesting aspect of Synthetix’s price story is that it pre-empted the broader cryptocurrency market rally that began in early 2021. So while most tokens began their price runs in early January, SNX began to trend higher in December 2020, rising from $4.39 to $7.22 in just a few days.
The token maintained its bullishness throughout the first few weeks of 2021 and reached its all-time high of $28.53 on February 14. However, several weeks of substantial volatility followed, with SNX bouncing to $13.27 and then back to $26.16 before a summer downturn tumbled to around $6.60 in June.
SNX managed to recover to $15.03 in September 2021, but a market-wide downturn has affected most major tokens since then, and SNX has been no exception.
SYNTHETIX (SNX) PRICE PREDICTIONS: 2025 – 2030
According to our long-term Synthetix (SNX) price predictions, the SNX crypto is estimated to have strong value growth. Therefore, Synthetix may turn out to be a very good investment in the next five to ten years.
SNX Price Prediction 2025 to 2030:
Year Deficit Low price
2025 $35 $8
2026 $42 $11
2027 $53 $17
2028 $61 $21
2029 $75 $30
2030 $84 $38
2025: The maximum expected price of SNX for 2025 is $35.
2030: The maximum expected price of SNX for 2030 is $84.
SYNTHETIX (SNX) PRICE PREDICTIONS FOR 2025
Any Synthetix price prediction is subject to several factors. Inevitably, given the volatility of the cryptocurrency market, any forecast is little more than speculation and can only serve to give us an idea of what an asset’s growth potential might be.
Given how massive derivatives trading has become in the last decade or so, the potential for a cryptocurrency-based alternative should be pretty obvious. Moreover, a platform like Synthetix can finally bring all the benefits of the blockchain (decentralization, security, etc.) to a much broader range of real-world financial assets. So does this mean that we are likely to see a substantial increase in the value of SNX in the coming years?
DigitalCoinPrice is a platform that certainly believes it. It has Synthetix making steady gains through the rest of 2022, reaching an average trading price of $7.68 by the end of the year, which would equate to around 35% growth over the current price. The token is also expected to perform well in 2023, and by the summer of 2024, it is projected to have more than doubled in value to $12.35. By the time 2025 rolls around, DigitalCoinPrice thinks SNX could be worth $17.04.
Elsewhere, TradingBeasts sees a slightly different future for Synthetix. According to their technical analysis, the SNX token will decline for much of 2022, ending the year by around 20%. However, 2023 will bring a strong recovery, and by December of that year, SNX is forecast to have reached a potential high of $9.76. Over the next 12 months, that figure is forecast to reach $12.88, and by 2025, Synthetix SNX is predicted to have reached a potential high of $13.10.
The Economic Forecasting Agency has also made a Synthetix price prediction for 2025. Their data suggests that SNX will struggle in both 2022 and the first half of 2023, after which it will start on an upward trajectory that will take it to $19.27 in January 2024. The SNX token will continue to build on this success, and by the time December 2025 rolls around, it could be worth up to $32.46.
HOW MUCH WILL SYNTHETIX (SNX) BE WORTH IN FIVE YEARS?
According to Synthetix price prediction and forecast, the future price of Synthetix SNX will be up to $45 per token in 5 years! Therefore, according to experts, the Synthetix platform is an excellent crypto asset with great potential.