Back to the list

Mythical unicorn and trash coins

01 February 2018 21:00, UTC
Financial Analyst FxPro Alexandr KUPZIKEVITCH

Those who bought bitcoins before 2017 or mined coins just before 2010 and did not throw away hard drive along with cryptowallet keys got very lucky as they found a mythical unicorn.

Investors and geeks, who cannot boast about their gift of vision entered the market just last year and as a result yielded only modest profits. Nevertheless, this investment still beats records and remains very profitable. However, in the surge of popularity the market became crowded with trash coins, the value of which will never exceed a few cents.

In December 2017 the co-founder of Apple Steve Voznyak sold his bitcoins for 20,000 dollars. The same decision made Emil Oldenburg – one of the founders of Bitcoin.com. Actions of these people may indicate that the long adjustment will occur.

Since the beginning of the year cryptocurrency reached the lowest point at 11,000 dollars. In general, on the market exists the sense of fatigue based on constant ups and downs of cryptocurrencies. The collapse does not create a panic but the growth does not cause a sense of euphoria either. After the December cryptocurrency rollercoaster, it will be hard to surprise investors. There are a lot of circulating media reports regarding exposed fraudulent schemes with ICO. All cases resemble each other: projects simply disappear into thin air. The biggest losses (up to 4 million dollars) suffered investors in ICO Benebit.

On the 26th of January it became known about the hack of the Japanese exchange Coincheck; NEM coins worth of about 530 million dollars were stolen. The exchange did not obtain the license from a moderator.

Now it became clear for the market that warnings are real than never before: even if a project is not a scam, it will be able to avoid hacker attacks or government regulations, the probability of its failing still remains high. A creation of a really successful project resembles the search for a unicorn: a market is crowded with trash coins, fraudulent schemes and hackers, because its capitalization is too high given current progress. In such crowded space it is becoming increasingly difficult to see the bright spots and in the medium term there is a high chance of a massive adjustment which will be capable to drop all ballast.

The market stage when there was a high risk to invest in a “mythical unicorn” has gone. Currently among thousands of meaningless names of cryptocurrencies it is hardly possible to see a star. Nevertheless, they definitely exist in TOP 40 ranking of Coinmarketcap.

As an example, in the cryptocommunity a coin Zcash is considered to be one of the most underrated on the market. Currently this coin is sold for 450 dollars and by the end of the year experts expect 1 700 dollars for it, thanks to its high degree of anonymity, whereas Stellar is considered to be a very promising one in terms of international bank transfers. On the flip side such coins as LENIN, STALIN or VK will hardly ever take off, although over the last six months their quantity grew in hundreds of times.

Nowadays Pavel Durov’s GRAM token on the platform TON (Telegram Open Network) is one of the most expected project. At the time of his working days in VK Pavel Durov became concerned about the safety of communication, having taken into the account precedents of serious interference of intelligence services in the activities of social networks and wanted to implement a monetary payment system as part of the social network.

After leaving Russia Durov focused on Telegram and now he works on creating a project which will combine everything he ever wished: anonymity, advantages of blockchain technology and his GRAM cryptocurrency.

After the ban of Telegram in Iran the switching to a decentralized blockchain will allow the project to get around any government blockages. This may explain the keen interest in the project.

Within the framework of the ICO closed round it was attracted approximately 4 billion dollars for major investors. According to FT the largest companies of Silicone Valley such as Apple, Google and others intend to invest in the project.

It is planned to issue 5 billion GRAM tokens. First investors purchased it for 0,3 dollars but from March 2018 (the approximate launch date) the token’s value may grow to 3,5 dollars. The Proof-of-Stake network protocol will be used which means that miners have nothing to count on.