Is market cap a valid data point with such a large percentage of these coins being held in reserve after a pre-mine?
Manipulated Market Caps
This brings me to another point. The market caps on a lot of these altcoins are hugely manipulated. Consider one of the original manipulated altcoins: Ripple. They premined all the coins! That is, they created all Ripples beforehand and only released them to the public a bit at a time.
There’s a huge amount of Ripples that are being held in reserve so that the actual float (that is, amount available to the public to trade) remains relatively small. Many premined coins do the exact same thing to manipulate not just price but their market caps. Only a small portion of the coins actually are traded while a big reserve sits on the side owned by their creators to keep the market cap of the coins high.
This isn’t anything new and in the stock market, stocks that play float manipulation games generally become juicy targets for short-sellers. Altcoins like Gnosis, for example only floated 5% of their coins, so ask yourself, how much of Gnosis’s $115M market cap as of this writing is real?
If that isn’t confusing enough, also consider that many of these Altcoins are actually subcoins of Ethereum and much of the market cap may be double-counted.
Thought Experiment
If that last section was too confusing, consider this thought experiment. Suppose I make a new coin tomorrow called FoolCoin. I premine the whole thing (100,000,000 coins) and only make 10 coins available. Perhaps I create a marketing campaign and even get enough people to desire the coin that Poloniex lists it. I sell just 1 of the coins for $10. FoolCoin now has a $1 Billion market cap. The next coin, I sell for $11 and now FoolCoin has a $1.1 Billion market cap. If there’s enough demand, I eventually end up selling the other 8 coins for $20 each at which point, FoolCoin now has a $2 Billion market cap.
I’ve just added $2 Billion dollars to the cryptocurrency market cap and have reduced Bitcoin dominance by a few percentage points. But did I really take anything out of bitcoin other than perhaps a few hundred dollars worth? Why The Bitcoin Dominance Index Is Deceiving | by Jimmy Song | Medium
I think the reason is even simpler - a few very big bag holders from the problemmatic ico dump every rally. Maid price has increased by the same percentage as Btc has in the last year. Whenever it (Maid) starts to exceed it, they dump. I have some of my position on margin, so this equation is pretty clear. This price action dissuades many traders from trading it. Only the long term investors buy it. The rest stay away. Too much other gratifying price action out there - like every other Crypto on Polo…!! The Btc rise is pretty awesome but the crypto of rise of the past months is absolutely spectacular. It will take some major news on Maid to overwhelm the big Maid bagholders who seem to prefer unloading into any rally to convert to Btc or other cryptos.
That’s my theory. Given the sometimes indiscriminate rise of many other projects 10, 20,30, 50X in recent months, I don’t think fundamentals, or what stage in development matters so much as just owning a piece of these new companies for the new money entering the space. To my mind, there is no other reason Maid should be falling in market cap right now. It should at least be keeping up or enjoying a nice pump or two periodically with all the rest.
I totally agree that a lot of bagholders are dumping it above ICO price whenever they have the occasion.
Real money takes this dump and cold store the MAIDs.
This will continue until there is a shortage.
It’s exactly what happen with XRP-
People thought there was much more coin in circulation, until some positive news sparked a rally which then triggered a squeeze when everybody realized that ripple lab was not selling, and actually was about to lock out the supply in escrow. Add the fact that there was a cognitive dissonance on ripple with bitcoiners calling it a scam for years, when reality of bank adoptions eventually knocked at the door. Same will happen to maid, the cognitive dissonance is real, people call it vaporware. reality should knock at the door soon hopefully.
I think that inflation rate is going to be crucial.
if inflation is large, honestly it would be unfair to all the hardcore fans who have pushed this project for years in the shadow. If people, who have accumulated for years, get their stake smashed in a few months by some opportunistic Chinese farmer it will create an outrage in the community.
Farming and inflation must to be executed with the community in mind.
On top of that low inflation will boost the price and contribute to the hype when the network is live.
Everyone will be happy if coin fractions are distributed sparsely and evenly for a high price, because it will make their stake appreciate.
Rapid surge and high prices is also a fantastic piece of free advertising and will help quick adoption & curiosity early, when we need it the most.
These things were at 2c not that long ago, at the current price 36c that’s an 1700% increase.
I guess perspectives are built on when you bought in. I’m not complaining.
(Correct me if my math is wrong )
Why would you ever say “will be”???
There is no way you could know for sure.
“I find myself wondering why maidsafecoin is being overlooked”
Uncertainty, that’s why, I think. And maybe justly so. Maybe we will never pull it out. The project is very, very complex. Maybe the team just bit more than they can ever chew. Another possible reason is that we have witnessed long delays already and sometimes, it feels to me, that there is no end to them. A third reason, I can think of, is funding. MaidSafe never acquired the funds other projects did, hence the Bank to the Future fundraising.
How long before the next cash shortages?
Another possible reason - the comparatively low price right now. Other alts have left MaidSafe in the dust. I wouldn’t be surprised if Maid drops out of top twenty thus overstepping a psychological barrier and further accelerating a downfall. Markets are irrational. People tend to put their money on what goes up, making it go even higher and unfortunately MaidSafe has not joined the party yet.
Having said all that, I would like to add, please don’t see me as negative. I am a supporter of the project, I own MaidSafe coins and I want, for obvious reasons, the project to succeed.
I guess, my whole point is, we ought to be sober, keep our feet on the ground and don’t put all eggs in one basket.
MaidSafe might fail. This is not negativism but a possibility.
**** me. If Maid fails with what I have invested so far I ll be damned.
i have seen Ethereum at 40cts. I have seen darkcoin, now dash at 1$. I have even seen with my own eyes bitcoin just below the dollar. I have profited from none, because I have taken none of them seriously.
I can tell you I take Maid seriously. Institutional serious level of seriousness. I have been talking to friends and even a few investors about it (without jeopardizing my career).
My experience of watching them all flying to the moon is that all it takes is a dream and credibility.
We have the dream, we just need credibility now. Let’s bring beta, and safe network, and this 36cts, will turn in a hundred dollar. I swear.
I am tracking the prices in real time in my spreadsheet that queries the last prices at poloniex every minute.
If I simply held bitcoins, I would have gained only 291.63% in USD.
But having exchanged my BTC to MAID at the ICO, I had an increase of 340.36% in BTC, which means that in USD I had a gain of 1624.58%
In a normal world this would be eye popping.
In the cryptoworld these are small potatoes.
But personally I really like the stability of the MAID prices, it is a very good indicator that there are strong hands trusting the value proposition of the project, and that they are also seeing that the project has real value.
The ones that are pumped and dumped are crap coins, that behavior hasn’t been there in these last three years, and that is very encouraging, it is one of the few that behaves as a mature market.
Btw, at poloniex the MAID lending is still dreadful (which is a good thing!) with interest rates at the Rock bottom of 0.00001% nobody is betting against MAID.
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