Blockchain Once Praised by SEC Chairman Lands Among Top Projects with Highest Investor Losses

Once praised by SEC Chairman Gary Gensler, the layer-1 blockchain network Algorand now ranks among the projects with the highest investor losses.

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Blockchain Once Praised by SEC Chairman Lands Among Top Projects with Highest Investor Losses

According to data from the cryptocurrency analytics platform IntoTheBlock, 89% of holders of Algorand's ALGO tokens are currently at a loss. Only 3% of investors have broken even, and a mere 8% are in profit—a notably low figure considering the number of investors who have sustained losses while holding onto this layer-1 blockchain token for the long term.

ALGO is currently one of the cryptocurrencies with the highest number of investor losses among the layer-1 altcoins tracked by IntoTheBlock. Established in 2017 by computer scientist and MIT professor Silvio Micali, Algorand is a decentralized network built to simultaneously address the triple challenges of speed, security, and decentralization in blockchain.

IntoTheBlock's Statistics on Algorand

Comparison of profit-loss ratio of holder (in & out of the money) of layer-1 blockchain projects. Source: IntoTheBlock (05/02/2024)

Algorand has faced challenges in recent years with performance lagging behind other projects in the same sector. The ALGO token reached its all-time high of $3.56 three months after Gary Gensler's 2019 presentation, but has since plummeted to just $0.17—a staggering 95% decrease in value.

Price volatility of Algorand throughout its project history. Source: CoinGecko (05/02/2024)

Forbes recently listed Algorand among its 20 billion-dollar crypto projects, albeit without practical utility.

Previously, during his tenure teaching at MIT Sloan School of Management before becoming SEC Chairman, Gary Gensler openly praised the project and its co-founder.

Gensler used Algorand as an example of alternative choices to Bitcoin's proof-of-work consensus algorithm.

He explained how Algorand randomly selects groups of network nodes to approve new transactions, followed by a larger group of nodes verifying those tasks. "I apologize if I oversimplify Silvio's outstanding work," he said at the time.

"Silvio has a great technology and has results; you might even be able to build Uber on it," Gensler said. Many cryptocurrency investors viewed Gensler's comments as validation for the project, especially after he assumed the role of SEC Chairman in 2021.

Gensler's praise for Algorand garnered significant attention from the community in April 2023, following the SEC lawsuit against the cryptocurrency exchange Bittrex, alleging that ALGO tokens were securities.

The Algorand Foundation, a non-profit organization tasked with developing the Algorand blockchain network, maintains that the ALGO token does not qualify as a security under US law.