Does recent strength in the Immutable X (IMX) NFT marketplace token make it a good investment in 2022?

4 min read

Last month, Immutable X, an Ethereum-based non-fungible token (NFT) scaling platform, launched its IMX token. Prices of the IMX/USD have been volatile in the past six weeks since its launch, peaking in late November before tumbling into December. Recent price increases have been modest, but remain below its launch price.

What is Immutable X? In this article we look at the protocol and how the new Immutable X cryptocurrency works, and analyse early predictions for the coin’s future price trend.

Immutable X facilitates Ethereum NFT transactions

The Immutable X platform was created by Australia-based game developer Immutable and blockchain scaling startup StarkWare, bringing together StarkWare’s Layer-2 scaling knowledge with Immutable’s understanding of NFTs.

Immutable was founded by entrepreneur James Ferguson, who previously led a software development team at a large ecommerce provider, and his brother Robbie Ferguson, also an entrepreneur. The company raised $15m in a Series A financing round in September 2019 to accelerate development of its flagship trading card game, Gods Unchained. The round was led by technology investment company Naspers Ventures and the Galaxy Digital EOS VC Fund run by Galaxy Digital, a blockchain-focused merchant bank. Apex Capital Partners also participated.

“Currently, trading on the Ethereum network is broken,” Immutable’s developer guide states. “The network currently supports approximately 150,000 non-fungible token transactions per day at 30% network usage. Trades can fail on occasion, returning assets to owners instead of trading, and the time they take to process is inconsistent, sometimes taking upwards of an hour. This is not only annoying for users who are attempting to trade, it can also cause problems for developers building on the network.

“Additionally, developers are unable to mint NFTs sustainably, making it impossible for projects to properly fundraise to continue expansion and create more content for their users. Our plan is for Immutable X to support more than 200 million trades per day while consuming less than 30% of Ethereum’s capacity.”

Immutable X aims to provide “instant trading, massive scalability and zero gas fees for minting and trading, all without compromising user or asset security,” according to the project’s whitepaper.

Immutable X features a ZK-rollup scaling engine to increase scalability on the Ethereum blockchain, while maintaining its underlying security. Rollups batch “large numbers of transactions, generating a ‘validity proof’ for those transactions, and then submitting that proof to an L1 smart contract,” the whitepaper notes, adding: “In the words of Ethereum co-founder Vitalik Buterin, ‘the Ethereum ecosystem is likely to be all-in one rollups as a scaling strategy for the near and mid-term future’.”

Immutable X’s rollup enables more than 9,000 transfers, trades and mints of NFTs a second.

Immutable launches native IMX token

Immutable X announced its ERC-20 token IMX in July and introduced a play-to-earn campaign for players of its Gods Unchained game to receive a share of 10m IMX tokens distributed as retrospective stage rewards and another 40m distributed as alpha stage rewards ahead of the November launch.

The IMX token is designed to accelerate the growth of Immutable X by rewarding users for adopting the protocol and trading, contributing to building an NFT ecosystem on the platform.

A user earns points each time they perform an action that benefits Immutable X. A rewards pool is distributed proportionately based on the number of points a user holds.

The supply of IMX tokens totals 2 billion, allocated to ecosystem development, project development, token sales and the foundation reserve.

IMX has three main uses:

  1. 20% of each transaction fee is paid in IMX. If a user does not own IMX, their ETH will be converted into IMX automatically.
  2. Transaction fees are sent to a staking rewards pool that will be distributed proportionally among users who stake their IMX tokens.
  3. Users have an IMX-weighted vote in protocol governance decisions.

The Immutable X coin chart shows that IMX traded to $6.84 when it launched on 5 November and closed at $5.24. The price slipped to $3.05 on 8 November but rebounded and advanced to a new high of $9.50 on 26 November, when it reached a total value locked (TVL) of $250m.

Cryptocurrency exchange Kucoin announced it would start listing the token from 29 November.

By 6 December, the IMX price had slipped back to $4.50 and, while it moved up to $6.57 on 9 December, it fell to $3.94 on 20 December. The price moved above the $4.50 level on 22 December.

What do the latest predictions indicate for the IMX price in the months and years ahead?

Immutable X (IMX) price prediction: is the token a buy or sell?

Immutable X technical analysis from CoinCodex was bearish at the time of writing (23 December) with the price around $4.32, with one indicator showing bullish signals and 14 ‘sell’ signals.

The 3- to 21-day simple moving averages (SMAs) and exponential moving averages (EMAs) were bearish, along with the stochastic relative strength index (RSI) and volume-weighted moving average. The Hull Moving Average was giving a ‘buy’ signal, while the average directional index (ADX), the moving average convergence divergence (MACD) and the relative strength index (RSI) remained neutral.

There was technical support at $4.40 down to $4.18, with resistance at $4.62 and up to $4.84, the data showed.

CoinCodex predicted that the immutable x coin value could rise by 1.87% to $4.40 by 28 December.

Meanwhile, Wallet Investor’s Immutable X token price prediction was bearish on the near-term outlook, predicting that IMX could fall to $2.878 by the end of the month. It expected the token to shed further value in 2022, ending the year at $2.504 and fall to $0.426 by the end of 2023. But the algorithm-based forecasting site projected that the price could rise to $0.695 by the end of 2024 and move back above $2 to $2.149 by the end of 2025.

Gov Capital predicted that the IMX token price could collapse to zero by September 2022, declining from $5.312 at the start of the year.

The IMX token forecast from Price Prediction was bullish, however, estimating that the price could average $7.24 in 2022 and climb by more than 200% to an average of $23.09 in 2025. The token could then gain another 500% to average $146.60 in 2030.

DigitalCoin had a similar outlook for 2022 at an average price of $6.89, but forecasted slower growth than Price Prediction, with IMX expected to average $8.49 in 2025 and $18.15 in 2028, peaking at $19.38.

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, and even harder to give long-term estimates. As such, analysts and algorithm-based forecasters can and do get their predictions wrong.

We recommend that you always do your own research, follow the latest Immutable X crypto news and consider the latest market trends, technical and fundamental analysis, and expert opinion before making any investment decision. Keep in mind that past performance is no guarantee of future returns. And never invest more than you can afford to lose.

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