I really feel for the ETN team who have to put up with so much hatred and critical arguments. Often based on nothing but emotions and very little knowledge.
But we are a coin of the ordinary people. Very likeable as a project with a personal and down to earth approach. Little technical details, lots of vision. The investors of ETN appear to me as investors mostly in their early investing career. They do not pay attention to the right things. They react emotionally to a sinking price. I understand that. Its human nature. That’ s why the investing game is one of the most complicated games in the world, and yet one of the simplest. Now let’ s get on with the things that do matter: simple economics
Wat determines the price of a coin?
That question is very simply to answer. Supply and demand. When there are many coins entering the market, and not enough people to buy those coins up. The sellers will start to lower their prices to get rid of their coins. This drives prices down. This also works in the opposite direction.
Supply of ETN.
Lets start with the supply side since the ETN supply is clearly outperforming the demand side.
Supply comes in my opinion from 2 sides:
Miners supporting the network and getting ETN rewards in return. Those miners will sell those ETN coins on the market to pay for their operating costs. Those rewards will reduce overtime but currently there are 8 to 10 million ETN coins added to the market every day. At the current price this is around 45.000 USD every day. (assuming miners instantly dump the coins on the market) This is not that much compared to the daily volume. Which means: investors are selling.
Users/investors cashing out ETN for other crypto’s or fiat currency
Demand of ETN.
Demand currently only consists of investors buying the coins and try to get some financial gains out of it. This is all speculative and as we all know, sentiment can change in a heartbeat. The REAL demand for Electroneum will come from a different group of people:
Users who want to make digital payments using Electroneum as the company who provides this service. Sure they can do a gig, they can download the Mobile Miner but they certainly will want to use Electroneum beyond those income resources. They will look for ETN to buy to transact digitally. I’ve been in Uganda. The current banking system is a joke. I’ve seen people sleeping in front of a ATM for days, waiting for money to arrive. ETN does not only appeal to 1.7 unbanked people. But I can assure you there are 1.3b more people who experience horrible banking services and are willing to try new things.
Gig.guru will provide a marketplace where employer and employee can buy and offer labour. These employees need to go and buy ETN to pay there employee. I underestimated this GIG economy. Look up Fiverr or some sort. It will amaze you how big this gig thing is. People all over the world doing work for each other. The employee will need to pay for this labour though. This is quite expensive and might take a while to arrive. ETN can do this better: Faster, cheaper, borderless.
All of the demandside is not in play at the moment. We are still in the production and testing phase. Nothing is fully in place yet. There is simply no demand for ETN. On top of that we also have investor sentiment against us. Lots of people are looking at prices only. BTC is killing it. Everyone is fleeing from ETN to the king. Hence the price decline. All coins are affected although ETN is performing very poorly in comparison. Why? ETN is making one mistake time and time again in my honest opinion:
They over promise and under deliver.
Don’t get me wrong. Electroneum is working hard, doing all the right things in a methodic manner. I would not want to see it any other way. The thing is. Richard Ells is a very enthusiastic man. (one thing I like about him) He talks about monster deals and such and gives often timeframes on production milestones. The problem is. There is still no monster deal and timeframes are not being met. Some daydreaming kids started speculating about a deal with Samsung. I mean come on people. Do not raise the bar at impossible highs. Reality can’t live up to that kind of expectations. Everyone disappointed starts selling. Price tumbles further and we got ourselves a self-fulfilling prophecy.
If you are still in ETN. Look at statistics that show user growth. This is where the real money will come from. Speculation (which is all there is now) will be a tiny fraction of the growth in the future. Look at:
- User numbers
- App downloads
- Merchants accepting ETN
- Gig.guru traffic
- Volume increases from the buying side
Make no mistake. We can sink way lower. Point is it does not matter. There is no market atm. Dollar cost average in is my best strategy. Electroneum will at least need 3 to 5 year to reach a decent amount of its potential. We are trying to convince people to manage their money in an entire different way. Not an easy thing to do.
For the ETN team:
Love to see the hard work. A lot of investors appreciate the effort. Don’t get caught up in these negative comment sections on the internet. I have my suspicions we are getting attacked by a social media troll army. However, please try to manage expectations with more caution. I will suggest:
1. Consistent communication
Once every two weeks an update will do the job. Doesn’t have to be new stuff. Tell us what’s going on. How progress is being made. Try to limit talks about upcoming events. Would be wonderfull if you can schedule the day and time of release.
2. Do not use timeframes
I repeat, do not use timeframes for future releases.
3. Under promise, over deliver!