Has anyone else noticed the curious trend in cryptocurrency prices right now where the value of the lowest priced coins is growing by the largest % despite them having a huge coin supply? To me this says that the cryptocurrency space is overflowing with inexperienced traders/investors who have no idea what market cap is or how it's calculated. FOMO fever is the only explanation for this. People just hearing about cryptocurrency feel like they missed the boat on bitcoin and are trying to catch the next big thing. These are the same people who think that they need to be able to afford a whole coin. Take Cardano for example.. at a price of ~$1 it seems like a steal and people like owning a whole coin of something instead of a small fraction of a bitcoin, but then you look closer and see that there is a whopping 25,927,070,538 ADA. That's about 1500x more coins than bitcoin! In a rational market scarcity is what drives up price and many of these coins have billions yet this market seems to be unable to do basic math and rewards it! Crazy.
Why is this relevant to Decred?
Decred ($109, 6,491,330 DCR) has the smallest circulating supply of the top 50 coins with the exception of only Veritaseum ($377, 2,036,645 VERI) and ZCash ($578, 2,948,644). (Bitconnect doesn't count because it is a ponzi scheme) Now cut the circulating Decred coin supply in half due to them being locked up in POS mining. On this simple metric alone the price of Decred in the current market landscape should be so much higher. If and when this irrational market we find ourselves in ever starts to resemble reality then it will put a smile on Decred holders.
Disclaimer: I don't care about technical analysis or swing trading at all. I only hold coins long term for the projects I believe in. In this case it looks like the Decred price is still at least an order of magnitude lower than it should be.
Why is this relevant to Decred?
Decred ($109, 6,491,330 DCR) has the smallest circulating supply of the top 50 coins with the exception of only Veritaseum ($377, 2,036,645 VERI) and ZCash ($578, 2,948,644). (Bitconnect doesn't count because it is a ponzi scheme) Now cut the circulating Decred coin supply in half due to them being locked up in POS mining. On this simple metric alone the price of Decred in the current market landscape should be so much higher. If and when this irrational market we find ourselves in ever starts to resemble reality then it will put a smile on Decred holders.
Disclaimer: I don't care about technical analysis or swing trading at all. I only hold coins long term for the projects I believe in. In this case it looks like the Decred price is still at least an order of magnitude lower than it should be.
Agree with everything you said + the disclaimer. Although I do trade a little with small % of portfolio when chance occurs
What do you think the long term value should be?
I'd be lying if I claimed to know what the long term price should be. Price discovery should happen naturally as a result of the free markets. With that being said, based on the current total cryptocurrency market cap, the limited circulating coin supply, the talented Devs, and what I believe to be superior tech of Decred, I think the price of Decred should be over $1000 relative to the other coins once the attention shifts from quick buck pump and dump coins to legitimate society altering technologies.
The reason why I think the price of Decred must be stated in terms relative to other coins and the total cryptocurrency market is because to some degree cryptocurrency is still an experiment. A few assumptions are being made in order to get to these growing valuations.
1) That the consensus mechanisms underlying POW and/or POS cannot be undermined. To this date there have been no successful hacks or exploits on bitcoins code but in the unlikely event that one is found there would be a devastating correction on the entire market. 9+ years of the brightest white and black hat hackers attacking bitcoin's network have not found anything so this is a great indicator of confidence in the network but on the other hand look at the latest security vulnerability in intel chips.. anything is possible. The stakes are high but so are the rewards. For the first time in human history people have the option to be in control of their own money (you are not in control of the money you store in banks).
2) Mass adoption and acceptance of cryptocurrency as a store of value is coming and will lead to large institutions and 401k funds to begin allocating a percentage of assets into cryptocurrency as part of a diversified portfolio.
3) They will be able to scale. This is not just Decred's challenge but all cryptocurrency will need to be able to increase the number of transactions per second if they are to cut out the middlemen (visa/banks) and be used for everyday transactions (like daily coffee) as promised in the original bitcoin whitepaper. This is an active area of research and development.
And a couple Decred specific assumptions:
4) Decred's governance and superior tech is finally recognized by the market. The truth is that many people haven't even heard of Decred. If Decred is added to more exchanges such as Coinbase and exchanges in the eastern markets, awareness and acceptability will increase. Yes this is true for all coins but the point here is that if people had more time to understand the technology behind the coins they are buying they would understand that Decred is a better mousetrap. Who wouldn't buy the better mousetrap?
5) Decred is resistant to forking which siphons off value from the main chain and errodes confidence. This is by design because Decred stakeholders have a voice via stake voting unlike bitcoin. People don't want to have to ask themselves if they are holding the right "flavor" of bitcoin every morning due to the endless forks that are a result of their dysfunctional governance.
6) Decred's performance relative to other cryptocurrencies will increase. Decred can totally replace bitcoin, bitcoin does nothing that Decred doesn't do better. It can also siphon value from other coins with weaker governance (DASH) and if the privacy features are good can siphon value from the leading anonymous coins (ZEC, ZEN, ZCL, XMR, etc). This has not happened yet but is likely to happen since Decred in theory is much more agile than other currencies due to it's built in voting. As was seen in the speed in which lightning network integration was proposed, voted on, and nearly integrated Decred can quickly implement new original features as well as assimilate the best features from other cryptocurrencies and pivot the intended use as directed by the stakeholders votes. (Decred Dev's please correct me if I am over promising but this is how I understand it)
7) This is a more minor point. When Decred Asics are introduced it might remove the constant sell pressure caused by Claymore Dual mining. I'm not sure that I buy that Decred asic owners are more likely to hold onto coins. I also haven't decided whether I think that asics are good or bad for the network but I think this is worth noting as removal of significant sell pressure would quicken the price discovery.
If those assumptions are true then the total cryptocurrency marketcap will raise to at least several trillion and therefore in the coming years the price will increase many fold. No one will believe me if I post a long term sustainable price because human minds are trained to think linearly however increases in network usage affect the price of a limited supply of coins exponentially. I think it will go beyond bitcoin's current value.
Very well said. Decred had a real chance of replacing Bitcoin as the store of value coin (digital gold), or at least it will likely be one of the few strong store of value coins. The chosen store of value coin(s) will be the highest price cryptoasset in the long run (from the book Cryptoassets). Sure I own 20 or so different coins, but Decred is the only one on the do not sell ANY for 3+ years list. Seriously hodl this one tight.
