Tezos is a smart contract blockchain, like Ethereum, which is built to host assets and decentralized applications (dApps). The difference with Tezos is that it is designed to be upgradable over time through on-chain governance to avoid any hard forks in the future. Anyone who holds Tezos’ native token, XTZ, can vote on potential updates, which the software can then carry out autonomously.

This innovative idea enabled Tezos to raise a record amount of funding through its initial coin offering (ICO), and its price has been on quite a journey since then. If you want to know the details then you’ve come to the right place. We’ve compiled everything you need in order to get a better understanding of the intricacies of XTZ price, as well as the factors which influence it.

Tezos Price History

In July 2017, Tezos raised a record-breaking $232 million in its ICO and hit the market trading at around $2. XTZ was mostly range-bound between $1 and $3 for the next few months, before finally gathering enough momentum towards the end of 2017 to surge over 300% in less than a fortnight, reaching its current all-time high of $11.95 on December 17th.

Prices quickly crashed, and a couple of months later XTZ had dropped almost 80% from its peak value to $2.50. It doubled over the next three weeks but quickly retraced again at the end of February. Some steady gains were made in the second quarter of 2018 and XTZ was inching towards $6 by the start of June. However, this was followed by yet another crash at the start of July, which saw XTZ’s price fall by 70% in a week, and after a more steady decline, XTZ ended 2018 below $0.50.

2019 was more successful for XTZ – between March and May, the price surged back up to $1.75. It dipped below $1 again at the start of July and this was followed by three months of consolidation. XTZ rallied again in November and finished the year trading at $1.33, representing gains of around 185% since the start of the year.

In 2020, XTZ price continued surging and had almost tripled by mid-February. This was followed by a sharp decline, which saw Tezos crashing by almost 50% in a single day in March to bottom out at $1.30. This marked the start of a period of growth, and by the middle of August, XTZ had climbed to over $4. It crashed again around the start of September and ended in 2020 at a price of $2.

The gains resumed in 2021, driven by overall favorable market conditions; and by the start of April, Tezos had risen by more than 170% to around $5.50.

Analyzing Tezos’s Price History

Tezos, like many other cryptocurrencies, tends to follow what’s known as a boom-and-bust cycle. This is a pattern in which growing excitement leads to a sudden surge in price before doubt and disillusionment set in – causing an equally sudden crash.

The first major price movement for XTZ came at the end of 2017 and wasn’t unique to Tezos – the entire crypto market pumped around that time on the heels of Bitcoin’s 2017 bull run. The crash that followed was also felt by many other coins and not unexpected since such a sharp increase would have been very difficult to sustain without some kind of correction. However, XTZ’s crash began a bit sooner than many other cryptocurrencies and was likely influenced by the lawsuit filed against the Tezos Foundation and its founders in December 2017. This lawsuit alleged that the Tezos (XTZ) ICO had constituted an unlicensed securities offering.

The way in which the funds raised in the ICO were used became a controversial issue amongst management, and towards the end of February, Tezos Foundation president Johann Gevers resigned. A couple of days later the price of XTZ began to decline again.

After some delays, the Tezos mainnet finally launched at the end of June 2018, which was the first time ICO investors gained access to their XTZ tokens. With all of the negative press that circulated over the previous year, many investors had lost faith in Tezos and immediately dumped their XTZ, sending its price crashing at the start of July 2018.

The project survived, however, and in October of 2019, the Babylon 2.0 upgrade was activated on the network. This made the consensus algorithm of the Tezos blockchain more robust, improved its governance mechanism, and expanded native smart contract functionality. The successful implementation of the update likely encouraged the rally which followed.

In 2020, Tezos was affected by some of the movements in the broader markets. XTZ’s huge single-day drop in March came as economies and borders were closing down around the world in response to the COVID-19 pandemic. The effect of this was felt by the whole cryptocurrency sector and the entire stock market, which experienced the biggest single-day crash since 1987.

The gains made by XTZ in August and its dip in September of 2020 were also common across many other cryptocurrencies, as was its renewed rally at the start of 2021 on the back of Bitcoin’s latest bull run.

Factors Influencing The Price of Tezos (XTZ)

A variety of different things can affect the price of Tezos, including project news and developments, the flow of assets on exchanges, public sentiment, and emerging trends in the wider cryptocurrency and global economies.

XTZ doesn’t have a max supply and is subject to an annual inflation rate capped at 5.4%. This means that the price of XTZ isn’t driven by scarcity like Bitcoin and could face downward pressure if demand for XTZ doesn’t scale to meet its growing supply.

The inflation is used to pay block rewards to network participants for securing Tezos’ proof-of-stake (PoS) blockchain. Unlike some other proof-of-stake protocols, anyone can participate in the consensus process by staking their XTZ, which Tezos refers to as “baking”. The staking (or baking) returns earned to make the dilution of XTZ’s supply irrelevant and make the network more secure by encouraging actual network participation.

The ability to earn passive income from staking XTZ drives demand for the token and as of April 2021, almost 80% of all XTZ are locked up and earning staking returns, meaning there is less XTZ on exchanges and the available supply is therefore effectively reduced.

In addition to the staking demand from investors, there is also network demand to consider. Applications that run on Tezos require gas – like Ethereum. The more developer activity there is on Tezos, the more demand for XTZ there will be to cover gas costs. More than 1,300 new developers learned to code Tezos smart contracts in 2019, and as of 2021, there are over 130 different projects built on the Tezos blockchain.

In addition to independent developers, a number of platforms have announced plans to use the Tezos blockchain for Security Token Offerings (STOs). At least $2.6 billion worth of STOs has been announced for issuance on the Tezos network.

The increasing staking and network demand for XTZ, coupled with its decreasing circulating supply (due to users locking it up to generate rewards) should apply upward pressure to the price of XTZ.

Live Tezos Value and Market Cap

The live price of Tezos varies from moment to moment as it’s dictated by the balance of buyers and sellers on exchanges, which is in constant flux.

Given Tezos’ volatility, its live price can change by a large amount in a very short space of time. The market cap of Tezos is equal to the price of XTZ multiplied by the number of XTZ in circulation. 

Tezos Price FAQ

How is the price of Tezos calculated?

Tezos’ price at any given time is decided by the balance of supply and demand on exchanges. When more people are buying XTZ than selling it, the price goes up, and when more are selling than buying, the price goes down.

Why is the price of Tezos different on different cryptocurrency exchanges?

Tezos’ price is based purely on trading as there is no standard global Tezos price, so no one knows what it is “supposed” to cost. The trading volume and liquidity are different for each exchange and those differences are what affects the price.

What will Tezos be worth in the future?

It’s impossible to make price predictions with any kind of certainty as a whole host of different factors could impact XTZ’s future value. If the Tezos ecosystem continues to expand there will be more network demand for XTZ. Also, any upgrades implemented in the future which improve the protocol would likely make Tezos more attractive to developers, as well as increasing confidence among investors. These factors could drive XTZ price growth in the future.

Conclusion

Following Tezos’ record-breaking and controversial ICO, the price of XTZ has been on quite a ride, encompassing lows of $0.34 and highs of $11.95. The journey hasn’t been smooth, however, and the volatility of XTZ has led to many surges and crashes along the way for active traders to take advantage of.

A number of different things play a role in determining Tezos’ price, including positive and negative press around the project, demand for staking XTZ, and trends in the rest of the crypto market and wider economy. Its current valuation is derived from the balance of supply and demand in the markets and constantly changes.

If you want to get started with the most user-friendly trading experience on the market, register with Kriptomat today to begin your journey into the world of Tezos and cryptocurrencies!