Expansion Cycles of $AMPL [Explained]
Do you know what’s funny? If you open up CoinGecko and go to any token page it will show you the price chart by default. But if you go to the $AMPL page, it will show you the market cap chart by default.
See for yourself:
CoinGecko knows what’s up. They understand that the supply chart is the go-to one.
Just like how you look at the price chart for $BTC or $ETH to understand its value and project where it’s going, you should look at the $AMPL supply chart as this is where the demand is being reflected rather than the price.
And just look at that chart. Isn’t it beautiful? Can you guess what comes next?
The next major $AMPL supply expansion.
Let’s Talk about $AMPL Expansion Cycles
Take a look at $AMPL’s full supply chart
What do you see?
We can see a flat plateau for nearly a year since $AMPL went live. There was pretty much no action from today’s perspective.
Then suddenly there was a huge uptick bringing the supply to ~780M AMPL units and giving $AMPL a market cap of $689M.
This massive supply expansion put $AMPL in the spotlight and made every other DeFi coin jealous as it surpassed so many, making it into the top 30 coins by market cap for a brief moment.
Now, if you’ve been following me on Twitter @DocumentingAMPL then you might have noticed that I’ve been pushing the narrative of the 3rd great expansion cycle coming up once $AMPL gets on Aave.
However, after digging deeper, I’ve actually concluded that it’s the 2nd great expansion cycle ahead of us. The 1st one was in mid-2020 when $AMPL’s supply skyrocketed to 780M. As for the expansions before that, it’s hard to name any of them as “GREAT”.
The First $AMPL Expansion Cycle
The first $AMPL expansion cycle happened in July 2020. At the start of this expansion, the supply for $AMPL was around 20 million $AMPL and it shot up to reach as high as 780 million $AMPL, giving the cryptocurrency a market cap of $689 million.
Why and how did this happen?
The supply expansion was primarily driven by two factors:
- Ampleforth Geysers
- DeFi Summer
Ampleforth Geysers + DeFi Summer = Increase in $AMPL Awareness /Demand = Rising $AMPL Price = $AMPL Supply Expansion
The Ampleforth Geysers, which launched in June 2020, are smart faucets that incentivize on-chain liquidity by rewarding liquidity providers with $AMPL. The first geyser to launch was the AMPL/ETH trading pair on Uniswap and was initially rewarding liquidity providers of this pool 100%+ APY:
This lucrative Ampleforth Geyser incited $AMPL awareness and got many people in DeFi involved with $AMPL. Interest in $AMPL grew rapidly from this and then came along the DeFi summer boom.
DeFi enthusiasts (there weren’t many degens at that time) were going crazy for yield farming, high APYs.
From that, the price of $AMPL naturally increased and if you’re familiar with how $AMPL works, you know what happens next.
And get this:
The price of $AMPL continued to climb higher and higher through July and managed to reach as high as $3.75 at its peak. This is what drove $AMPL’s first great expansion cycle.
What will drive the next one?
The Second $AMPL Expansion Cycle
Again, just look at that chart…
If you put the fundamentals aside and look at $AMPL’s supply from a purely technical perspective, it looks like it’s pretty close to starting the next great expansion somewhere around the beginning of Q3 2021.
Since the first expansion, the $AMPL supply has consolidated and has now formed a bullish symmetrical triangle, which is a bullish continuation chart pattern.
Now, couple this with some fundamentals, and things get even more bullish.
In one of my previous articles, I wrote how the successful launch of $FORTH, the governance token of Ampleforth is about to open all doors for $AMPL. Today, I’ll explain why $FORTH is the catalyst for $AMPL’s second expansion cycle.
$AMPL supply expansion cycles are ultimately caused by a rapidly increasing $AMPL price in a short period of time.
Soon, all the stars of FA and TA will align.
First, $AMPL will Trade on Major Exchanges
Ampleforth’s $FORTH token has already been listed on Coinbase, Binance, Huobi, and OKEx. Meanwhile, $AMPL isn’t listed on any of these top exchanges because its elastic supply is too unfamiliar for people to comprehend and exchanges don’t want to deal with all of the support tickets from people asking why their balance is fluctuating.
However, now that Ampelforth’s governance token is gaining traction and is already listed on these exchanges, it’s only a matter of time before the accompanying $AMPL token gets listed as well.
Second, $AMPL Lending & Borrowing will Drive Demand
Soon after the $FORTH token launched, the $AMPL on Aave proposal finally met the required threshold to be put into on-chain voting.
There’s no doubt that the $FORTH token launch helped this proposal get passed and now it’s only a matter of time before people will be able to lend and borrow $AMPL on Aave.
Once it happens, $AMPL usage will skyrocket and so will demand, which translates to an ever-increasing token price fuelled by rampant speculators.
So yeah, the second great expansion cycle is ahead of us. Probably in early Q3 this year.
Can we Predict $AMPL Cycles?
With $AMPL being only 2 years old now, it’s still quite young and therefore too early to spot strong regularities in its expansion cycles. It’s simply not like Bitcoin with its 4-year price cycles and 12 years of data to back it up.
However, as I presented in this article, I think that for now $AMPL’s expansion cycles can be predicted by 1) analyzing the patterns on the supply chart and 2) analyzing fundamental price drivers caused by upcoming events.
By doing those two things, I think we can successfully predict $AMPL expansion cycles in the short term (5–10 years) and over time we’ll be able to detect patterns similar to Bitcoin halvings that allow models such as S2F to exist.
What do you think about $AMPL’s expansion cycles? Do you think it will experience one soon? Let me know in the comment section below.