The 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% lower than its all-time high that was reached in January this year. Its market cap has collapsed to about $388 million while its ranking in cryptocurrencies has dropped to 163. At its peak, it was among the top 100 biggest coins in the world.
What is Immutable X?
Immutable X is a layer 2 platform that seeks to supercharge Ethereum-built non-fungible tokens (NFTs). It can be compared to other layers 2 projects like Lopring and Polygon, with its only difference being that it focuses on NFTs. IMX is its native currency.
Immutable X’s goal is relatively simple. It is to accelerate the performance of Ethereum’s NFTs. As a result, it helps to reduce costs for the buyers and increase their efficiency. Additionally, Immutable is incredibly faster since 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 makes it possible to mint new coins through validators.
The network has become popular among users in the past few months. For example, in January, the developers made a partnership with GameStop. The well-known video game retailer will use its network to mint and sell NFTs.
Why IMX is falling
However, the IMX price has struggled in the past few months. First, there are fears about the state of the NFT industry. Some analysts believe that this industry will see a slowdown in the coming years. If this slowdown happens, blockchain platforms with exposure to the industry will be affected.
Second, there are fears that the rising interest rates will crash high-risk assets like cryptocurrencies and NFTs. The Fed has signaled that it will implement about three to four rate hikes this year while some analysts expect 7 hikes. Therefore, if this happens, there is a likelihood that Immutable X price will struggle.
Third, the NFT industry is getting incredibly competitive. While Ethereum is the leading player in the sector, other platforms like Avalanche and Solana are coming up very fast. As competition rises, Immutable X will see its market share wane.
Finally, the Immutable X price has crashed because of the rising tensions in Europe. These worries have helped drag down other assets like stocks.