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RE: TA of my favourite low market cap crypto: CargoX 📈
Hey @Bitbrain, the chart looks ripe for a dip buy but the token itself looks pretty weak fundamentally, how does value accrue to a token which sole purpose is to pay for the usage of a service?
Unlike a token such as LOCI, the value of CXO does not have a USD target that it is pegged to. It's the regular old supply/demand that will determine the price. Companies that want to use CXO must buy it from the same exchanges that you and I use (KuCoin specifically). The more it gets hodled by investors, the less the supply, the greater the price. With CargoX aggressively undercutting typical B/L prices it should be in hot demand as it presents a massive cost saving. It also has possible future utility if they implement using it as payment for cargo storage too.
HEy man, by the sound of it, it seems like just another high velocity payment token for a dapp, have a look at this article, they break down very well why value can't accrue to those:
https://multicoin.capital/2017/12/08/understanding-token-velocity/
Vitalik also wrote about that back in the days:
https://vitalik.ca/general/2017/10/17/moe.html
The gist is that there is no incentive to hold high velocity payment tokens because they rapidly lose value because users constantly trade in and out of the token (to protect themselves against price volatility). Even if the dapp is successful, they'll probably end up enabling a direct BTC or fiat on ramp way to buy services thus rendering the token useless (it's happened to a lot of projects like Quantstamps: https://www.ethnews.com/quantstamp-investors-uncertain-about-qsp-tokens-validity). Check these articles out mate. That being said, if your token has a masternode utility that would be a plus be if it's just payment then it's probably not worth it as an investment.
Thank you for your very valid comments!
I am glad that you raise these questions. If nobody asked the hard questions then we would happily be living in a delusional dream-world, a most undesirable state of affairs!
The answer to your question is not quick and easy, but it is important. I started to formulate it, when I realised that others may have similar concerns and that this information could be valuable to all.
I light of that I have decided to formulate it into a short post. CXO is a fantastic investment, one I regard as one of my best. It deserves to do well and I want the people to see that and understand why. I'm not saying that just because I hold it. I hold over 50 other cryptos, some of which are admittedly rather rubbish or very high risk. e.g. I held Quantstamp (though I sold it the second that things started looking dodgy). I don't regard CXO as a dodgy investment at all (hey, I've been wrong before, but unfortunately some things will always remain unpredictable).
I would like to repost your comment and respond to it publicly for the benefit of all. Please let me know if you have any objections to this.
https://steemit.com/cryptocurrency/@bitbrain/crypto-token-economics-q-and-a-cargox
Go for it man :)