TRON (TRX)–We’re almost there.
The crypto market is creeping back into the green after nearly a week of savage price drops. It’s going to be some time before we see an eclipsing of the value established in early January, before the correction started, but for now it seems safe that cryptocurrency, as an industry, will grow out of this crash. Despite suffering one of the heaviest price dips of all currencies, Tron has maintained a position in the Top 15 of market capitalization, while posting a 20% increase in TRX price over the past 24 hours.
Here are a few reasons why we expect Tron to eclipse the top ten in market capitalization again in 2018:
An Abundance of Partnerships
The current correction happened for a number of reasons.
The first was overbought, overvalued market conditions. We’re seeing a lot of finger-pointing, a good amount of which towards TRX, which fell from 0.30 USD to under five cents in the span of a month. However, the entire market was in a precarious position, mostly in the form of weak-handed investors and those who had extended too much of their capital. Downward corrections tend to be in proportion to the preceding upward swing, and we saw the entire industry go from 300 billion to 800 in a very short span. We were expecting there to be a pullback in pricing, in particular from the indicators that Bitcoin’s price was falling relative to the rest of the market. The severity this correction–one of the worst in the history of cryptocurrency–was expounded by the shaky conditions of the market as a whole.
The second, and more pressing reason was out of a lack of utility and usability for the currencies. People bought Bitcoin, Litecoin and the rest and then had nothing to do with them. The whole reason to own crypto, unless you are an enthusiast of the technology, is the money to be gained by the appreciating price. When that price stopped climbing and fell backwards, investors were fast to sell in an attempt to lock in their gains. A quick read of Charles Wheelan’s book Naked Money reveals that deflationary currencies (of which, almost all cryptos are), suppress the desire for customers to spend with the tender for the simple reason that a price in Bitcoin today will be lower a month from now. The only way we can break out of this cycle and create a stable price in crypto is by creating legitimate use-cases and giving people a reason to spend their crypto. Tron is heading in that direction, with strong partnerships that will increase adoption and given people an avenue for using their TRX. Sure, there are going to be those who hold Tron with the intention of cashing in at a higher price. But there will also be waves of new adopters who buy TRX for its use in gaming, with no intention to hold the currency outside of what they can use for entertainment.
We know how this sounds.
Tron Dogs. Really?
Sometimes adoption is about giving people a reason to buy your currency. So even if you aren’t excited for TRX to play Tron’s version of Crypto Kitties, think of it this way: you buy some TRX to play Tron Dogs. Then you show it to friends or coworkers and they get in on it. Now, through the guise of a game, you’ve given people (including yourself) a reason to own and spend TRX. Cryptocurrencies are not going to reach widespread saturation without developing legitimate reasons for people to buy and spend them. Tron Dogs is the gateway for more investors, developers and enthusiasts to get into Tron and establish novel uses for the currency. At present, Tron’s price is attractive and psychologically appealing for these games. You want liquidity. You want to prompt people to spend and trade their coins instead of hoarding them. At three pennies per coin, you can own hundreds for under 10 USD. The price is going to change over time, but for now it presents a significant opportunity for similar projects looking to utilize a cheap, abundant currency that is built for gaming and entertainment platforms. Remember, adoption is a slow then exponential process. Bitcoin will hit saturation when people have a reason to spend Bitcoin. That’s going to be hard while the steep deflationary appreciation of BTC continues, as there is little reason to spend Bitcoin (which is gaining value) as opposed to traditional fiat (which loses value over time). Tron is giving people a reason to spend TRX: through gaming, through high liquidity and growing partnerships that will require the exchange of currency.
Betting on Justin Sun
We have been bullish on TRX’s Justin Sun for some time. In an interview with Tron.Live, Game.com’s CEO Xu Le not only heaped praise on the young founder of TRX, but highlighted him as the type of tireless leader that is capable of big things–including building Tron to a billion dollar valuation in just four months: “When a person is able scale something from scratch to a global large scale, we can gauge one’s ability form this. Tron went from a market cap of $2 billion to an all time high of $16 billion market cap after partnering with us…What we should focus on is this young man’s determination, endurance, and execution of tasks under pressure.”
For the cryptocurrencies with a strong founder/leader presence (Roger Ver BCash, Charlie Lee Litecoin prior to the selloff, etc), you are investing in the effort and actions of that founder as much as you are the technology of the coin. While cryptocurrency is moving away from centralization and authority-figures, the price of TRX and other coins is still tied to the behavior of founders as much as Apple was to Steve Jobs. For some, this has been a polarizing point for buying into Tron. You can make the case that Justin Sun has been guilty of pumping his currency, overpromising on announcements and not doing enough to allow the technology to speak for itself.
We have a different opinion.
In the span of four months, despite the threat of China banning cryptocurrency and the screaming high price of Bitcoin killing altcoin value in Q3 & Q4 2017, Justin Sun was able to grow TRX to 0.30 USD per coin and tens of billions of dollars in market capitalization. He was able to form partnerships with multiple, large name and large user base companies that will pay dividends for Tron’s growth and give TRX legitimate sources of utility.
All of the FUD that TRX has experienced is the product of investors behaving irrationally and immaturely with the currency. Tron came out of nowhere, leaping from less than a penny to over 0.30 USD in the span of weeks. This created overnight millionaires and an abundance of jealous, FOMO-induced investors that threw their dollars into TRX despite the obvious, looming correction. When the price plummeted back to under 0.10 USD, the investors burned by the sudden price change blamed Sun and other insubstantial claims (Tron is more vaporware than Cardano despite having legitimate partnerships and established utility?). Essentially, it has become vogue to hate on Tron and point to it as an example of irresponsible crypto behavior when the reality was poor timing for TRX and market conditions out of the currency’s control. Many other coins peaked in early January and suffered the same precipitous drop off, but Tron has a much more visible punching bag in the form of Justin Sun.
You can continue to sling FUD at a cryptocurrency that has grown immensely in less than half a year and established more paths for real-world implementation and usability than nearly any other top 20 coin. Or, you can recognize Justin Sun for the tireless promoter that he is. Judging by the shifting landscape of cryptocurrency, where investors are starving for positive news and reasons to buy currency outside of the deflationary price, the growing utility of Tron and number of partnerships will lead to substantial adoption and subsequent price gains throughout 2018.