The price of PancakeSwap’s native cryptocurrency – CAKE – has been rising in the past two weeks, reigniting investor interest as it prepares to launch non-fungible tokens (NFTs).
The coin, created in September 2020, has become popular among investors on social media, but the price fell back earlier this month in line with a flash crash in cryptocurrency prices.
Is now a good time to invest in the cryptocurrency ahead of a potential price recovery?
This CAKE coin analysis looks at the food-themed cryptocurrency’s recent developments and its future price prospects.
What is PancakeSwap?
PancakeSwap is a decentralised exchange (DEX) that runs on the Binance Smart Chain (BSC). It’s similar to Uniswap on the Ethereum blockchain. It was launched a year ago in September by anonymous developers.
Whereas centralised exchanges like Binance and Coinbase are run by a single company, you can trade on a DEX without an intermediary. Like most decentralised finance (DeFi) activity to date, most DEXs are based on Ethereum. PancakeSwap, however, aims to compete with Ethereum by providing lower fees and faster transactions, among other features.
PancakeSwap operates an automated market maker model. Users deposit their funds into a liquidity pool in exchange for income from liquidity provider tokens – known as FLIP tokens. Users make their trades against the liquidity pool. Holders of the FLIP tokens can then use them to reclaim their share of the liquidity pool – and a share of the trading fees. Users can deposit and lock up their FLIP tokens to farm, or earn, additional tokens, such as CAKE and SYRUP, as a reward. There is no set holding time before tokens can be un-staked.
Users can also buy tickets for regular lotteries to earn more coins or NFTs, which they can hold in a wallet or trade for CAKE.
On 23 April, PancakeSwap made the transition to V2. Two of its smart contracts, PancakeSwap Router and PancakeSwap Factory were not upgradeable, so it updated its contracts and created a new set of liquidity pool tokens. The changes allow developers to create additional incentives by adjusting the fee structure, and give them the opportunity to ramp up operational security. Community members voted on how the fee structure was adjusted.
That's a wrap!— PancakeSwap :pancakes: #BSC (@PancakeSwap) April 24, 2021
:white_check_mark:The last V1 #PancakeSwap farm has been migrated to V2.
A huge THANK YOU for your support over the last few days! :rabbit::hearts:
Coming up next week:
:recycle:Auto-compounding $CAKE Syrup Pool
PancakeSwap has quickly attracted users since its launch because it allows traders to instantly swap tokens without registering for accounts and charges low transaction fees. Users can trade directly from their cryptocurrency wallet, as the cryptocurrency is not held on an exchange.
PancakeSwap users can stake their CAKE tokens in SYRUP liquidity pools for free to earn high interest rates. They can also receive free tokens every week from new project launches.
Staking FLIP tokens gives users more exposure to price fluctuations than the SYRUP pools, but they can also receive higher interest rates, offsetting the risk. Users that stake tokens in liquidity pools earn trading fees, even if PancakeSwap does not support their chosen pair.
At the end of April, PancakeSwap launched automatic compounding in the Auto CAKE Syrup Pool so that users do no not need to manually re-stake CAKE tokens to get the best interest rates.
On 20 May, a hacker used the PancakeSwap exchange to carry out a flash loan attack on the DeFi yield farming aggregator Pancake Bunny, crashing the price. According to a blog post by Pancake Bunny, the hacker used PancakeSwap to borrow a large amount of binance coin (BNB) and then manipulated the BNB price against the bunny token and tether to get “a huge amount” of bunny and dump it on the market. They then paid back the remaining BNB on PancakeSwap. The bunny price plunged by more than 90% and the attack took out over $200m in assets.
The developers at Pancake Bunny noted that the attack was market manipulation rather than exploiting a security flaw.
Back in March, there was a coordinated DNS spoofing attack on the PancakeSwap and Cream Finance websites. PancakeSwap migrated to a new domain host after the attack and improved security settings.
PancakeSwap to launch NFT marketplace
On 8 September, PancakeSwap’s developers announced plans to launch an NFT marketplace and PancakeSquad NFTs on 22 September. All the fees from the marketplace and NFTs will be used to buy back and burn CAKE coins. Users will need to hold CAKE coins to mint, or create, NFTs, which should increase demand for the cryptocurrency while the coin burning will reduce supply. This should provide support for the price.
Activity on NFT marketplaces surged in August after a lull earlier in the summer, and while sales have dropped back in September they remain above July levels, data from NonFungible.com shows.
CAKE price looks to regain upward trend
The CAKE coin chart climbed from $0.0002318 when it launched in September 2020 to a high of $21.41 on 19 February as cryptocurrency prices rallied. It slipped back to $8.40 on 28 February but rebounded to reach a peak of $44.18 on 30 April.
However, a collapse in prices across the crypto markets pulled the CAKE price back to $9.66 briefly on 22 June. The coin held above $10 on 20 July when the broader cryptocurrencies bottomed out, and it moved up to $26.59 on 28 August. More recently, CAKE slipped back to $17.85 on 8 September following a flash crash in the bitcoin price that carried other coins lower. But it has since moved back above the $20 mark.
What are the expectations for CAKE coin’s future price as its use develops, especially getting in on the NFT craze?
CAKE coin price prediction: what to expect in 2021-2030?
At the time of writing, on 20 September, technical price analysis from CoinCodex was bearish with the price at $20.96, with nine indicators giving bullish signals, compared with 15 bearish signals. The 3- to 50-day simple moving averages (SMAs) were indicating CAKE was a sell, while the moving average convergence divergence (MACD) and relative strength index (RSI) were neutral.
The Pancake coin price prediction from algorithm-based forecasting site Wallet Investor predicts the average price for CAKE coin will rise to $27.41 by the end of 2021 and then reach a new all-time high of $53.60 by the end of 2022. It predicts the average price will climb above $100 in 2024 and reach $132.58 by the end of 2025.
The CAKE coin prediction from DigitalCoin projects the price will average $36.12 in 2022, up from $31.55 in 2021, and then climb to $43.48 in 2023 and $63.42 in 2025. It estimates that the price will surpass an average of $96.45 in 2028, reaching $104.02.
The CAKE price forecast from the Economy Forecast Agency estimates the price will rise to $41.07 at the end of December but then slip back to $29.74 in February 2022. It will then rebound, ending the year at $52.87 after reaching $62.94 in November 2022. While the site predicts the price will drop from $74.22 in March 2024 to $35.11 in February 2025, it expects the price to climb to $87.67 by October 2025.
For the long term, Coin Price Forecast’s CAKE/USD forecast suggests that the coin’s price will rise from $27.25 at the end of 2021 to $55.07 by the end of 2025 and $65.67 by the end of 2030.
It’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, let alone to give accurate long-term estimates. As such, analysts and online forecasting sites can get their predictions wrong.
We recommend that you always do your own research, and consider the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decisions. And never invest more than you can afford to lose.
Start trading cryptocurrencies with CFDs today
While CAKE is currently not available for trading on Capital.com, the platform gives you access to a wide range of other popular cryptocurrencies, from BTC, ETH and XRP to ADA, DOGE and DOT, through contracts for difference (CFDs).
Trading CFDs offers the opportunity to capitalise on both bullish and bearish price fluctuations. You can either hold a long position, speculating that the price of a cryptocurrency will rise, or a short position, speculating that it will fall.
Trade Bitcoin to US Dollar - BTC/USD CFD
As a leveraged product, CFDs are designed to maximise gains, which can be large on volatile assets such as cryptocurrencies. However, you should be aware of the high risk involved because CFD trading also magnifies losses if the asset price moves against your position.
Make sure you understand how CFDs work and do your own research before you begin, and never invest money you cannot afford to lose. Learn more about cryptocurrency CFDs with our comprehensive guide. Sign up for an account with Capital.com and follow the latest market news and price forecasts to spot the best trading opportunities.
Edited by Valerie Medleva
The CAKE price is trending higher in line with the broader cryptocurrency markets and a rise in coin’s use. CAKE is popular among crypto investors looking for the next coin that will explode in value.
Forecasts from prediction sites, like Wallet Investor and DigitalCoin, predict that CAKE’s price will rise against the US dollar. In the meantime, it’s important to keep in mind that prediction sites and analysts can and do get their estimates wrong.
When it comes to a highly volatile asset like a cryptocurrency token, it’s vital that you do your own research to determine if it’s a good fit for your investment portfolio. The decision should depend on your risk tolerance and how much money you have available for investing. Keep in mind that you should never invest more than you can afford to lose.
Whether the CAKE price will reach the $100 mark depends on the direction of the broader cryptocurrency markets. Wallet Investor is bullish and predicts the price will surpass $100 in 2024, while Coin Price Forecast predicts it will not reach that level before 2030.
You can buy the coin on cryptocurrency exchanges like Gate.io and Binance. With Capital.com, you can stay on top of the latest CAKE crypto news, price analysis and forecasts.