Tezos (XTZ) Rallies on Coinbase Staking Program
XTZ revived in the past few days, offering robust gains despite recent sell-offs.
Tezos (XTZ) showed its capability to rally, despite the recent sell-offs that depressed prices. XTZ is up easily above the $1 mark after a long stagnation. The chief reason is the recent announcement of staking options for Coinbase retail customers.
“Baking” XTZ is usually a voluntary locking of coins. But for those that keep funds in a custodial wallet, some of the rewards are lost. The Tezos network still has inherent inflation, and baking is a way to offset the increase in coins issued.
Staking XTZ requires a 35-45 day holding period, and after that Coinbase will reflect the balances every three days. The annualized rate of return for staking XTZ is 5%. The return is not guaranteed and is an average estimate based on previous “baking” periods. The numner of XTZ locked determines the final reward for each participant.
The news created an extended XTZ pump, lifting the asset from a stagnation around $0.86 to $1.15, up more than 24% in a single day. During the rally, XTZ touched a peak above $1.38, sinking afterward to the current levels.
XTZ is still not enough to signal a new bull run, especially for altcoins. But as US-based buyers now have more incentives, the asset may start to take off.
The Tezos platform still carries few transactions, based on its blockchain explorer. In the past day, one of the explorers logged only 333 transactions, basically a highly limited number. Most XTZ activity depends on exchanges. The Tezos network was viewed as having the potential to carry security tokens. However, those types of assets have failed to take off, and face insurmountable limits to trading.
Despite the Coinbase presence, the current pump is most likely supported by activity on Binance, show data from CryptoCompare. Still, Coinbase means XTZ sees direct USD trading, making up 45% of the volumes. Another 19% flow in from Tether (USDT), making XTZ potentially independent from BTC for price discovery.