Developed on the Ethereum blockchain, Balancer (BAL) is an automated market maker, in which each Balancer pool functions as a self-balancing weighted portfolio, liquidity provider, and price sensor. What makes Balancer unique is that investors can earn fees from traders who rebalance their portfolios by following arbitrage opportunities. The pooling of crowdsourced liquidity from these investor portfolios means traders benefit from more efficient trading – as well as Balancer’s Smart Order Router which finds the best available price.

BAL is the protocol’s governance token and also acts as an incentive for liquidity providers. Though still a relatively new token, the price of BAL has already seen significant change, and if you want to know why then you’re in the right place. We’ve compiled everything you need in order to get a better understanding of BAL price – as well as the factors which influence it.

Balancer Price History

BAL hit the crypto market towards the end of June 2020, trading at about $20. The rest of the month saw prices fall so that BAL was worth half that amount by the end of June. The decline continued until prices dipped below $8 in the middle of July. BAL had recovered to more than $10 by the end of the month.

In August, prices surged to almost $30, and after a 42% pullback to $17, continued to climb until reaching a peak of about $38.50 at the start of September. The positive momentum had been exhausted by that point, however, and prices halved over the next few days. This bearish trajectory continued for the next two months until BAL hit a low of about $8 in the first week of November. Although prices improved to almost $19 later that month, by the end of the year BAL had returned to a value of $13.74, representing a loss of 30% since the token started trading.

Prices immediately began to rally in 2021, doubling in January, and continuing to rise until they reached a peak of about $58 in the middle of February. The rest of the month saw a retracement so that BAL ended February below $35. The next couple of months proved to be fairly volatile, with BAL surging to peaks of more than $67 and $73 in March and April respectively, both followed by pullbacks of over 30%.

The next surge carried BAL up to its all-time high of $76.68 on May 4, representing year-to-date gains of almost 460%. By that point, Balancer had a market cap of about $500 million. A few days later, prices began to fall, and on May 19 BAL crashed 32% in a single day, during which it touched lows of under $25.

Analyzing Balancer Price History

Balancer price history can be analyzed with many of the same techniques as stock market analysis. Technical analysis (TA) involves using various indicators while studying price charts in order to make sense of previous price movements. With BAL, as with many other tradable assets, large price swings are often accompanied by spikes in trading volume, as a large number of users buy or sell their coins on exchanges.

Fundamental analysis (FA), on the other hand, looks at the finances and activities of a company, as well as the state of the wider market and economy. Balancer raised $3 million in a seed round led by Placeholder and Accomplice, and the team behind the project has extensive experience in the blockchain space including previous work with Maker and Coinbase. This could be a good sign for Balancer’s fundamentals.

Broader market trends have also played a role in the price history of BAL. Its surge in 2021 wasn’t unique – the entire crypto market pumped around this time. Bitcoin was in the midst of a major bull run then, and with such strong market dominance, any significant price movement for Bitcoin often impacts other cryptocurrencies.

The sudden crash in May 2021 was also market-wide, affecting every single major cryptocurrency. Various contributing factors have been suggested, including comments made by Elon Musk, a crackdown by Chinese authorities, liquidations, and a healthy market correction.

The overall price trend of BAL tends to follow what’s known as a boom-and-bust cycle. This is a pattern in which a period of growing excitement leads to a surge in price before doubt and disillusionment set in and result in a crash.

Factors Influencing The Price of Balancer (BAL)

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

BAL was launched with a finite total supply of 100 million, which will be gradually released into circulation over a period of several years. This makes BAL a scarce asset, like Bitcoin, and therefore potentially a good store of value in the long term.

There will likely be demand for BAL from those using the protocol to invest as several of the Balancer pools contain BAL. By investing in these pools, users earn trading fees and this passive income could incentivize more people to buy BAL and contribute liquidity.

The governance rights for BAL holders could further drive demand for the token. Holders can propose and vote on features such as issuance rewards and whitelisted pools for liquidity mining. As these decisions could directly affect the bottom line of traders and investors, Balancer users may be encouraged to hold BAL in order to participate in protocol governance.

The more users Balancer has, the more BAL demand there is likely to be. Events and trends that drive adoption of the Balancer protocol, such as upgrades, community engagement, and the popularity of decentralized finance, could therefore increase the price of BAL.

Live Balancer Value and Market Cap

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

Given BAL’s volatility, its live price can change by a large amount in a very short space of time. The market cap of Balancer is equal to the price of BAL multiplied by the number of BAL in the circulating supply.

Balancer Price FAQ

How is the price of BAL calculated?

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

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

BAL price is based purely on trading as there is no standard global Balancer 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 affect the price.

How will the BAL supply be distributed?

Of the total supply of 100 million BAL, a quarter was reserved for the team and 5% were allocated to each of the Balancer Ecosystem Fund and the fundraising fund. The rest will be mined by liquidity providers at a rate of 145,000 each week. This means, given a constant emission rate, it should take a total of 8.6 years for all tokens to enter the circulating supply.

What will BAL be worth in the future?

It’s impossible to make price predictions with any kind of absolute certainty, as a whole host of different factors could play a role in determining the future value of BAL. However, if the Balancer protocol gains more users in the future, this will likely drive demand for BAL and therefore boost its price.

Conclusion

The price of BAL has seen a lot of change since it first hit the market in June 2020, going from lows of under $8 to highs of over $76. Its price history hasn’t been smooth, however, as BAL’s volatility has led to surges and crashes along the way.

Many different factors have played a role in determining the price of BAL, including demand for governance rights, the number of people providing liquidity to the Balancer pools, 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 Balancer and cryptocurrencies!