How to Invest in PancakeSwap

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Before outlining how to invest in PancakeSwap, here’s an overview of the crypto market in 2022. With that in place, an intro to PancakeSwap and a CAKE token price outlook might help you generate some investment ideas.

The cryptocurrency market has experienced a persistent and severe correction in price in the first half of this year. To close out Q2, the first in class crypto, Bitcoin, fell below support at $20,000. Bitcoin’s price crashed below $19,000 per coin on cryptocurrency exchanges.

That key support at $20,000 had sustained throughout June after a brutal drop from $30K early in the month. Market watchers hoping crypto prices had found a floor for the remainder of 2022 were disappointed in the closing stretch of H1. BTC fell 58% for the quarter. It’s down some 70% from its previous all time high price around $69,000 in November.

 

The liquidations in Luna Terra UST, Celsius, and now crypto hedge fund Three Arrows Capital delivered critical shocks to crypto markets. Collapsing crypto prices also precipitated these liquidations at high risk crypto ventures. Folding crypto ventures and falling prices pulled each other down as market readjustments flowed through the crypto economy.

As a result, crypto prices are at cyclical and historic lows across the board.

Consequently, the remainder of this bear market is a conventionally attractive entry point for investing in cryptocurrency.

The keys to maximizing ROI on speculative long positions against an appreciating asset are: 1) entry points at or near market bottoms, and 2) taking positions in digital assets that appreciate the most over the span until you want to or want to be able to scoop profits or make exits.

Among the many assets investors have to choose from, PancakeSwap’s (CAKE) tokens have been a popular favorite of DeFi investors since 2021.

Who Owns PancakeSwap?

A group of anonymous developers launched PancakeSwap in Sept 2020. It’s a decentralized platform for trading Binance’s BEP20 tokens on a decentralized exchange.

In 2021, the exchange and its token (CAKE) exploded in volume and market cap. Midway through 2022, PancakeSwap is the third largest crypto dex by daily exchange volume.

Surpassing the Binance token exchange in volumes were Ethereum dexes, Uniswap and DFX.

But ultimately, no one “owns” PancakeSwap. It is a distributed collaboration of anonymous peers using decentralized trust and consensus protocols over the Internet.

As for who owns PancakeSwap tokens, there’s no telling exactly.

But to give an idea of how many users own and use CAKE, at the start of Q3 2022, the dex utility token had over 650,000 active addresses over the 90-day period.

PancakeSwap Analysis


While CAKE tokens have fallen with the rest of the crypto market in a cyclical deep correction, they have had market support and show promise for growth on the next upswing.

Unlike Luna Terra, CAKE isn’t a decentralized, algorithmic stablecoin. Luna Terra had only one purpose. That was to stabilize the UST algo stablecoin.

As many crypto engineers predicted, including Litecoin founder, Charlie Lee, an algo could not be depended on to hold a peg during a massive liquidation.

But CAKE is a use token for swapping Binance Smart Chain coins over a decentralized exchange. It has a sustainable use case that can support demand for it.

Unlike Celsius (CEL), CAKE isn’t a centralized finance (CeFi) company making risk-based trades and loans to earn yield and pay back CEL holders.

That failed because the risk-based trades and loans didn’t pay off and the company didn’t have a solvent balance sheet to pay back CEL investors.

But CAKE is a decentralized, trustless, peer-to-peer exchange for Binance tokens. Its value isn’t based on hedge fund style active management, but on its automated utility as a decentralized trading tool.

PancakeSwap Price Prediction


Any PancakeSwapprice prediction is only an educated guess at best. This website is not responsible for CAKE price movements. They are a sophisticated aggregation of market forces.

But there are some pertinent facts about the PancakeSwap Price that investors may want to consider before taking a long position in CAKE.

When the BSC dex debuted in 2020, CAKE token prices grew for the rest of the year, but remained under a dollar. They popped past $1.00 per token in Jan 2021, then spiked to an all time high price of $42 to close April 2021.

With an entry at CAKE’s price of $3 a coin to close Q2 2022, should it find its way back to its previous ATH price, the ROI would be 1300%.

The last time PancakeSwap token’s price was this low was on its way up past $3 at the start of Feb 2021. So it’s a historically low entry point for an asset with an active user base, staying power, and growth potential.

Going long on CAKE now means adding some DeFi to your holdings while getting exposure to Binance and even the broad influence of Bitcoin on crypto prices.

You can buy PancakeSwap tokens with a debit/credit card on Binance and Binance US (in most states) exchanges. It’s also traded on KuCoin, VCC Exchange, BKEX, and MXC.com.

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Category:Crypto

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