ETC Mantis Release & Market Behavior

ETC Mantis Release

Those who follow the ETC/ETH trading pair, in general, ETC has been a pretty solid buy when it trades at 0.05 ETH. When I made my "Ethereum Classic as an Investment" video, within a few days of releasing that video, ETC price spiked several hundred percent. Part of my reasoning behind that video was this 0.05 ETC/ETH metric as a solid buy point. I also believe Bitcoincash may follow a similar metric.

The risk here is that the market may decide that 0.05 ETC/ETH ratio is too expensive for Ethereum classic since it is clear that ETH is the place where ICO's launch. To this end, in terms of popularity, ETC is not there yet. However, ETC did release their beta client code this week for their development path. In their path forward, they are headed the route of Tezos and EOS in that they have adopted a functional programming language.

If you do not understand what a functional programming language is, just be aware, this permits better smart contracts to be written with far less likelihood of bugs that brought down the DAO.

Specific details of the code release can be found here.

While ETC has hit this .05 ratio, I am skeptical that this time it will hold. Ethereum Classic while it has developers, is moving at a slow pace in terms of developing out its ecosphere of economic partners relying on their smart contracting platform. It is an interesting place to launch a smart contract if a group is concerned that the ETH blockchain is centralized. For most organizations launching ICO's this is not their concern, the primary concerns are liquidity and capital raising which ETH provides.

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Market Behavior

I am also lately surprised by the number of projects launching in crypto. When I click on these projects and review their token/business models, most of these newer projects are shitcoins.

Today in cryptoworld, junk projects can raise 20+ mil in a few weeks without much to it. One of the main reason this happens is that for some reason, when a new crypto hits an exchange the price of that crypto spikes. This means that people speculate on a trade, and invest in an ICO with the idea of flipping the coin once it hits exchanges. This has worked with most any ICO that has launched in the last 3 months. This sort of trade mechanic causes money to be dumped into ICO's, even the dumbest projects possible.

The other odd thing I have begun to notice many a time is that fundamental analysis often fails to analyze price movements. The reason being is that many people who just trade or are looking for a fast ride higher do not care about any sort of metrics of user base for coins. Meaning, the ones that often rocket higher in cryptocurrency are ones that often have no users underpinning their system, but are simply sensationalized hype stories that YouTube personalities like myself jabber about, sending their prices up several hundred percent. Many a time this has a tendency to leave viewers as bag holders rather than in profitable positions (remember PIVX.)

Any crypto that spikes into the top 20 without an actual thriving user base, I consider a pump and dump, or an A-grade junk coin. If you look at the history of cryptocurrency you will see a tendency of certain coins to spike into the top 10 or 20, but then slowly lose the media hype and just fade away forgotten. It happens over and over again. When these coins spike into the top 20, plenty of press coverage, plenty of supporters. Then slowly, it all goes away because no one was using the coin to begin with.

How many purchases did you make with IOTA today? NEO? Hey, these coins got great YouTube videos covering them. They got plenty of hype. They got plenty of speculators trading them on exchanges. I am not saying they are bad, they could be good, just that if the speculators lose interest, then what?

With bitcoin, the speculators lose interest, but there is actual system users, using the coin besides pure speculation. You can buy Genesis Mining and other online products with it, you often get paid in Bitcoin in crypto-world one way or another. People can use it on online casinos. Due to its adoption, it has users. I like this.

Me liking this, though, is not as good as spotting the next A-grade junkcoin pump and dump like PIVX. If you get good at spotting those moves, just trade those and get your 300%+ weekly gains and forget about fundamental investing. Fundamentals will only hold you back in a world of scams, pumps, dumps, and hype cycles people can successfully trade off of.

Here is the deal. Long term, there is only going to emerge a few widespread cryptocurrencies for everyday use. Much like a system of metrics, how nations only use one unit of measure, similarly, people are only going to want to use a few digital currencies as a medium of exchange. There will always be more and more projects launching, but core users are going to gravitate around a few rather than the many. Think how Facebook is the main player in social media. Why? Because if you switch to something else, you will be missing a lot of your contacts list. Likewise, if you use the new junkcoin to hit the market as your favored method of exchange... how many people accept it?

Currencies favor the few, rather than the many. Now, there are other inventions here besides pure currency, such as international equities, tokenized assets, and system use tokens. Then also, there are the niche markets with coins or tokens that may strike a chord with specific audiences in terms of having a stable user base. This leaves a lot of playing field for development, and capital growth, just that the 101 renditions of the same thing we already have is not so interesting to me.

One common theme seems to be Asian investors driving the markets. To me as a westerner, this seems strange because their markets will bid up a coin specifically marketed to that demographic, but this coin will have all the same features of an existing coin like Ethereum. Yet, because it is marketed to that hemisphere, people in that hemisphere are more comfortable buying it, making it a solid investment apart from the technical specifications. Really, since few of the investors even understand any aspect of the technical details of crypto, it is better to analyze the market in terms of communities of interest which can bid specific projects higher on exchanges.

The real test with something like NEO will be, the new ICO's that launch, will they launch exclusively on NEO? Will they even accept NEO? If ICO's do not prefer their platform, will people want to develop serious use-case smart contract deployments on it? ... The point here is, if no one uses the system in the end, why would it stay in the top 10 in market cap?

Just my thoughts. NEO is not the kind of coin that interests me too much, because it going higher is contingent upon the behaviors of Asian speculators feeding into a hype cycle around the coin, and has diddly to do with anything about the coin, other than it is an Asian project. If this hype cycle gets fed long enough, and hard enough, it could gain actual user adoption for ICO's and smart contracts. If the hype cycle wavers, it was an A-grade junkcoin, pump and dump special.