Alejandro ArriecheThe price of the HEX token skyrocketed in 2021, gaining approximately 3,400% by 4 October moving from $0.012 per coin to $0.42. But it was not to last, and within a few weeks the price had plunged. At the time of writing (26 November), it stands at $0.188.
The project has succeeded in attracting crypto investors by offering blockchain-based certificates of deposits (CDs) and promising them substantial returns for locking up their HEX holdings for a period going from one to 5,555 days.
Are HEX returns sustainable, and can its price continue to go up in the future?
In the following article, we dig deeper into the project to predict the possible future price of HEX crypto.
HEX performance year-to-date (YTD) chart – Credit: Capital.com What is a HEX coin?
HEX was launched in December 2019 by Richard Schueler – better known as Richard Heart. Heart is a serial entrepreneur, author, YouTube personality, philanthropist and the founder of the PulseChain network, for which he raised over $27m for medical research.
According to HEX’s official website, the project is designed to become the first certificate of deposit (CD) in the cryptocurrency world. In traditional banking, a CD is a product that yields a return slightly higher than the average savings account for the customer after the customer agrees to lock up the invested funds for a fixed period.
A HEX CD works in the same way as in traditional banking since it pays a return to investors who decide to lock up their HEX holdings for a set period of one day to several years.
HEX claims to follow a proof-of-wait (PoW) protocol that does not require the participation of miners. Instead, investors mint new coins for holding HEX during the agreed-on holding period. Once the holding period comes to an end, the HEX smart contract is designed to create new coins to pay off the holder, who then becomes a “miner” in this particular ecosystem.
HEX is a second-layer (L2) application (scaling off-chain solution, which helps to increase throughput on the main chain) built on top of the Ethereum network and powered by a smart contract that regulates how tokens are minted and distributed to investors.
At the moment, HEX offers an average annual percentage yield (APY) of 40%, depending on the length of the holding period.
Diagram showing HEX properties – Credit: Capital.com HEX coin value
HEX coins are minted to pay off existing holders when their lock-up period is due.
The project is structured so that, as the price increases, the total number of HEX crypto that needs to be minted to pay off users will be lower. However, if the price suddenly collapses, token inflation will grow at an accelerated pace because more tokens will have to be created to pay the same amount.
In essence, the structure of the project guarantees that people will always be paid in HEX tokens, and since the price has gone up significantly in the past, new investors have piled on with the expectation of benefitting from the token’s elevated APY and a subsequent rise in its price.
The current price of $0.188 gives it a market capitalisation of $32.6bn ranking it 201st in the global crypto league table.
HEX cryptocurrency security audit: Is it safe to invest in HEX?
Since its inception in 2019, the HEX coin news has been full of questions about whether the project is safe and whether or not it is a scam.
One of the reasons behind those doubts were accusations regarding the HEX founder’s background. Mr Heart, whose actual name is Richard James Schueler, allegedly participated in unlawful activities back in 2002, including a violation of US spam laws.
However, in December 2019, the HEX smart contract underwent a security audit by CoinFabrik. According to their report, no critical severity issues were found.
CoinFabrik revealed several minor problems, including “replay signature with modified parameters” and “excessive gas for computation”, which were addressed by the HEX team. The auditor confirmed that the HEX contracts in Solidity were “well written and properly documented”.
HEX/USD forecast: technical analysis
HEX/USD price performance chart – Credit: Capital.com The latest price action in HEX coin shows that a potential bullish flag has been forming after the coin rose sharply from early August to late September. This formation is typically considered bullish as it indicates a brief pause in the rally that gives late buyers enough chance to jump in.
This view is reinforced by lower trading volumes, which indicate an exhaustion of the buying interest seen back in August while momentum readings are drifting lower with the relative strength index (RSI) already moving near the 50-mark while the moving average convergence divergence (MACD) has crossed below the signal line accompanied by steadily rising negative histogram readings.
All things considered, a directional HEX/USD forecast cannot be drafted at the moment as the current set-up is not directionally biased. However, if the price breaks above the flag, chances are that the former uptrend will continue, which could push the price of HEX near the $0.86 mark.
On the other hand, if the price breaks below the flag, then the pattern would be invalidated and the cryptocurrency could experience a full-blown trend reversal as a result.
These opinions and forecasts on HEX coin value are drafted after performing a thorough analysis of its price action. They should not be considered a recommendation to invest in this cryptocurrency. We recommend our traders to perform their own due diligence before making any trading decision.
HEX fundamental analysis
There are some risk factors to consider while evaluating the future prospects of HEX cryptocurrency:
Scam controversy. HEX addressed allegations of being a scam or even a Ponzi scheme in a special scam section on its website. Still, the level of controversy is high, and we suggest you conduct a very thorough research before making your own HEX crypto price prediction.
Availability. HEX crypto is available on around 20 exchanges, but it is not listed on any of the world’s largest cryptocurrency exchanges. It’s worth considering this factor, as smaller exchanges tend to be higher targets for hacking attacks.
The project relies significantly on its credibility. If the project loses credibility, the price of HEX can collapse. The reason for this is that a large volume of tokens would have to be issued to pay off current CD holders. This would increase the token’s supply dramatically, which would result in a price drop as the gap between supply and demand would be quite high. It claims over 200,000 wallets own HEX. According to CoinMarketCap there 173.41 billion tokens in circulation from a total supply of 633.5 billion.
HEX price prediction: analyst sentiment
According to Capital.com’s analyst Mikhail Karkhalev, the HEX project is a logical continuation of the development of the DeFi sector in the crypto market. He said:
“The desire to get rid of the middleman in the form of the banking system is progressing. Following the ability to make cross-border P2P [peer-to-peer] transactions and to take loans secured by cryptocurrencies, now we’ve got the possibility to open deposits (stake) at high interest rates without being involved in Ponzi schemes.”
“This is indeed progress, and I would even say a revolution in the banking system. Unlike a bank, which offers slightly higher interest rates on time deposits than standard deposits that barely cover inflation, DeFi projects like HEX offer the opportunity to earn more without being an intermediary and profit-maker like a bank,” Karkhalev added.
In conclusion, Karkhalev said that “staking is one of the most profitable investments in the cryptocurrency market today”, but it also highlights the necessity of considering the risks of “hacks, smart-contract errors and exit scams”.
Meanwhile, an algorithm-based prediction from Wallet Investor (on 26 November 2021) drafts a positive HEX coin price prediction for 2025. Based on an analysis of the HEX price trend, it believes the coin price may to hit $2.495 by the end of 2026.
Forecasts from Gov Capital, another algorithm-based crypto prediction service, are foreseeing a possible one-year surge in the price of HEX crypto to $0.7352 in one year's time.
