Tornado Cash price prediction: A whirlwind for TORN?

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Tornado Cash’s anonymity model is key to this system. What’s next for the protocol?

A tornado of bank notes                                 
Launched on Ethereum, Tornado Cash has expanded to Binance Smart Chain, Avalanche, Poylgon and xDai – Photo: Shutterstock
                                

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Part of the appeal of cryptocurrencies is their decentralised nature, which gives control back to the users. Privacy coins have become popular, as they guarantee no banks or centralised authorities are looking at your transactions.

However, there is always a risk that these platforms will be used for malicious activity.

Tornado Cash landed in the middle of a scandal after hackers were accused of using its platform to launder the 4,600 Ether coins, worth around $15m, that were stolen from Crypto.com in January 2022. More controversy plagued the protocol in April 2022, when some 1,400 ETH were found being ‘washed’ on the platform. The funds are presumed to be the proceeds from the Ronin attack earlier in March.

In early June, Optimism tokens were lost to an attack on market maker Wintermute. The attacker sold their OP token holdings by converting them to Ether and transferring them to unknown addresses on Tornado Cash. 

TORN had already been on a bearish trend, but after the US Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against the currency mixer, the token dropped nearly 30% in a 24-hour trading window. Torn is accused of laundering sums of over $7bn which had been stolen by hackers backed by North Korea. As a result of these sanctions, American citizens and businesses are prohibited from using Tornado Cash or interacting with any wallets tied to the protocol. 

The token recorded its highest price so far this year of $67.69 in early March, but at the time of writing is trading at $21.75. Can Tornado Cash break out again, or will the mixing protocol’s reputation be irrevocably damaged? What is the latest Tornado Cash price prediction?

What is Tornado Cash (TORN)?

Privacy coins have been around for a while now: the first can be traced back to 2014. Tornado Cash is a new solution for investors who want their transactions to remain private. The Tornado Cash smart contract started off on the Ethereum network, but it has since expanded onto Binance Smart Chain, Avalanche and other blockchains.

Tornado Cash uses deposits and withdrawals to achieve its privacy goal. Investors can send in a deposit of cryptocurrency and others can withdraw it. To take out the funds, the user must have a “secret” or “note” that is given by the original depositor. This transaction is not publicly linked, and no external observer can tell which deposit links to which withdrawal.

TORN is the smart contract’s governance token and is used by the community to vote on new updates. The supply is split between the founding developers, liquidity rewards, the protocol’s treasury and initial airdrops.

From the Tornado Cash whitepaper

The Tornado Cash Privacy Solution whitepaper was published in 2019, and at three pages long is relatively short.

The whitepaper stated: “Tornado.Cash implements an Ethereum zero-knowledge privacy solution: a smart contract that accepts transactions in Ether (in future also in ERC-20 tokens) so that the amount can be later withdrawn with no reference to the original transaction.”

As of 9 August 2022, the whitepaper appears to be inaccessible.

So, that’s the general overview of the protocol and the associated cryptocurrency. Before looking at any price predictions, let’s take a look at the coin’s price history.

TORN’s price history

Tornado Cash launched in February 2021 and airdropped 500,000 TORN, accounting for 5% of the total 10 billion TORN supply. The price rocketed from the launch price of $214.29 to its all-time high of $437.41 on 13 February 2021.

It peaked again at $425.03 a few days later, on 21 February 2021. This came after the exchange BKEX listed TORN with a USDT pairing. The $400 mark proved to be too high a price point, however, and the bears pulled the token down over the coming days. TORN dropped below $200 by the end of February and below $150 during the first week of March.

It saw a slight price surge on 14 March 2021, when it climbed to around the $180 level. Four days earlier, Tornado Cash had announced it was adding back-ups to its withdrawal keys. This allowed users to store multiple encrypted withdrawal notes on the blockchain, which could be accessed by a single encryption key.

The following day, the Tornado Cash privacy smart contract was praised by Ethereum co-founder Vitalik Buterin on the Tim Ferriss podcast. But while TORN managed to climb back to roughly $180 mid-March, it fell below $100 at the beginning of April. TORN continued falling into May 2021 and dropped to roughly $50.

The coin came close to the $100 mark again at the beginning of June. This corresponded with a community vote on an update to the treasury fund. A blog post said it plans on dedicating 5% to key collaborators in the Tornado Cash community. On 3 June 2021, the day before the vote ended, the token hit $85.98 and it was revealed the following day that the proposal had been approved.

June 2021 proved to be an exciting month for the privacy smart contract. A few days after the proposal, Tornado Cash revealed it had expanded to the Binance Smart Chain. But the TORN token began to struggle and started falling at the end of the month. It dropped below $50 on 20 June and fell to the $20 mark in July.

In August 2021, Tornado Cash announced another proposal that its community could start voting on. The aims of Proposal 8 were to upgrade the treasury, add security to further proposals and improve the precision of the circulating supply. The TORN price hit $62 on 8 August 2021. It continued climbing to $74 on 27 August, when it was deployed on the xDai chain.

The smart contract made another blockchain expansion announcement the following month, when it revealed it was deploying on Avalanche. Tornado Cash required a community vote to expand. On 16 September 2021 the idea was put to TORN holders, who approved the proposal, and the price reached $78.

TORN’s bearish trend

TORN stayed around the $60 mark for the rest of September and October 2021. It started plummeting in November, and dropped below $50. At the start of December 2021, it had fallen under $40.

The coin saw a small spike after 15 December 2021, when Tornado Cash Nova was announced. This was a beta version of an Ethereum pool that allowed arbitrary amounts of ETH to be transferred, rather than just the fixed amounts offered by its original smart contract.

However, TORN continued falling after this announcement. The privacy platform was then hit by a huge scandal, as the Ether stolen in a Crypto.com hack in January 2022 was allegedly laundered through the Tornado Cash smart contract. Experts said that this was not technically “money laundering” but rather the obfuscation, or mixing, of funds – but it was still being treated with suspicion.

The worst fears of the cynics – that Tornado Cash could be used for washing stolen funds – had come true, and the token was punished for it. On 24 January 2022, TORN reached its (first) all-time low of $18.49.

After hitting that price point, it managed to regain some of the lost trust with investors. The team behind the NFT platform LooksRare confirmed on 15 February 2022 that they withdrew $30m worth of ETH through Tornado Cash. Increased activity for TORN and other privacy-focused protocols also spelt good news for the price of TORN. 

However, the use of TORN to process stolen funds remained a concern after Ether was found being washed on the mixing protocol on 4 April. These funds are presumed to be the proceeds of the Ronin hack in March.

In a move that raised the eyebrows of crypto privacy devotees, Tornado Cash announced the following on Twitter:  

The Chainalysis oracle is a free smart contract, which scans crypto wallets for sanctions compliance. The tool was launched in March amid financial and regulatory concerns following Russia’s invasion of Ukraine. The token met a new all-time low of $15.72 on 14 June, following multiple market-wide crashes. Roughly in line with broader crypto market activity, the token made some gains toward the end of July, closing on 31 July at $25.09.

Tornado Cash is the second mixer targeted by the US Treasury this year. Blender.io was been shut down by OFAC in May, citing Blender’s use by North Korean hacking groups as well as global ransomware gangs, such as Conti.

On 8 August 2022, the Treasury said in a statement that “Action is being taken pursuant to Executive Order (EO) 13694, as amended, and follows OFAC’s May 6, 2022 designation of virtual currency mixer Blender.io”. 

“Virtual currency mixers that assist criminals are a threat to US national security,” the statement said. 

At the time of writing on 9 August 2022, the coin is currently trading at $21.75.

Now let’s look at what analysts are saying about a Tornado Cash coin price prediction.

Tornado Cash price prediction

It seems analysts are split over the future of TORN, with some bullish in sentiment while others offer bearish forecasts.

WalletInvestor states TORN is a “bad” long-term investment. Its Tornado Cash price prediction for 2022 suggests the coin will lose most of its value and drop to $19.40 by the end of the year, and not make any substantial recovery.

PricePrediction is much more bullish in its Tornado Cash coin price prediction. It estimates the governance token to climb to a maximum of $37.79 in 2022 and $58.33 in 2023. The site argues the coin will continue to rise in value over the next decade, passing $100 at some point in 2025. Its Tornado Cash price prediction for 2030 is for TORN to climb to $660.97.

DigitalCoinPrice’s forecast is more reserved. It thinks TORN will rise to $30.25 in September this year. Its Tornado Cash price prediction for 2025 is $42.42. In 2030, DigitalCoinPrice expects TORN to be worth $100.28.

The TORN token has lost about 95% of its value since its all-time high in February 2021. For Tornado Cash to start gaining again, market conditions will need to improve.

FAQs

How many Tornado Cash coins are there?

There are almost 1.1 million TORN tokens in circulation, at the time of writing. Tornado Cash has stated that there is a maximum supply of 10 million TORN.

Is Tornado Cash a good investment?

It might be. Despite numerous controversies, Tornado Cash has seen some positive price movements – but TORN still has a long way to go before it reaches its previous all-time high of $437. 

Remember, you should always do your own research before investing.

Will Tornado Cash go up?

It could do. Tornado cash price predictions are very mixed: WalletInvestor argues that TORN will lose most of its value in the near future, while PricePrediction and DigitalCoinPrice are convinced it will eventually race past $100.

Price predictions are often wrong, however. Always do your own research before investing, and never invest any money you can not afford to lose.

Should I invest in Tornado Cash?

It depends. Tornado Cash has lost 95% of its value since launching in February 2021, dropping from $437 to $21.75.

Some TORN price predictions are hopeful that it will start gaining again, but cryptocurrencies are volatile, so you should never invest more than you can afford to lose.

Further reading

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
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