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Hackernoon logoTokens with no applications will die soon by@marc.couzic

Tokens with no applications will die soon

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High reputation of the project but no platform, no application and no adoptionโ€ฆ You are likely to loose a lot of money holding. Fortunately, market maturity is slowly showingย up.

The current market dip is currently exhibiting the cruel truth. The market is being manipulated on 2 sides. On the one hand, unscrupulous CEOs have manipulated the market with cooked ICO figures, overwhelming token swaps, extensive ICO marketing with no real intention of delivering a product. On the other side, big financial corporations and institutions are playing the legal game of regulation and ETF approval in order to crush the price of the cryptocurrency market while they have already started to build some buying strategies.

As a matter of fact, we most knew that the only aim of 80% ICOs that occurred between 2017/18 was to raise funds with any innovative or just funny idea without looking at the feasibility of the market their project was targeting. In case, your token is launched by a project with high reputation that has no platform, no particular use case and not a single early adopter it is likely you have invested in one of those projects and the token you purchased will loose totally its value in the year or even month to come.

As a consequence, most commentators are loosing momentum by getting highly emotional. We have even heard top influencers apologizing for being too optimistic in their market analysis. However, all this was about to happen. But letโ€™s not forget the Technology is amazing and the ultimate aim is to deliver the promised solution to token holders. There have been too many amateurs. Letโ€™s see how some token price evolve over the last year.

1- Strong Adoption, open source platforms and applications but aging technology.

The most well known exemple is the first Token ever created: Ethereum. Currently struggling with scalability issues and confronted to high competition, Ethereumโ€™s monopoly is at stake. Developers are preparing a 2nd version. Meanwhile, the token price continue its drop. Now more than 90% from ATH.

2- Tokens with no Adoption or Application.

That is the case for many tokens. Being on an exit scam or not is not the question. Some founders have good intuitions but are not able to deliver a single product. In this case, your token will totally loose momentum. Here is the example of many projects that we wonโ€™t name here in order not to stigmatize any (there are just plenty). Those tokens have lost between 100% to 10 000% of their value in less than a year!

3- Tokens with a Platform and early adopters.

Fortunately, the sky is not so grey. There are some projects that are surviving quite well the storm of this one year market dip. They have succeeded in keeping a reasonable amount of liquidities on exchanges and their token price fluctuate not only with the global market but the evolution of the project. Those are showing us that 2019โ€“2021 will be the year of maturity for cryptocurrencies. Letโ€™s take the price chart evolution of Decentraland token as an example.

So is it still possible to make a good investment?

Compared to Ethereum, and most of alts loosing 95% of their value, Decentraland token has been relatively stable compared to others and lately, even if the bear market has intensified, Decentraland has lost only 70% from its ATH. With more adoption, the token is also more likely to regain its ATH in few weeks compare to tokens with slow or no IT development. This has already happened for Decentraland back in May 2018.

There are many examples of such sort. For wise investors, the idea is to spot the right project with a working application and early adopters. Then the big hype is still there around the corner!

Written by Marc Couzic


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