What is going on with the Electroneum coin?

A note from a few weeks later: Well, I made a prediction in this post that didn’t come to pass quite as I thought, Electroneum held it’s value pretty well and bounced back quickly. I’ll leave the article up for those interested, but note that the information is no longer relevant. 

I wrote a little about mining electroneum last week,  but it’s such an interesting coin right now that I feel it deserves more attention.

I’m going to cover my thoughts a little bit on wheather or not you should be buying into it right now. This is not investment advice, I am nought but a clueless blogger, so hear me out then make up your own mind. I am writing this on the 1st of December 2017, and I am writing from a perspective of RIGHT NOW. That means if you are reading this even a week later, you need to fill in the history gaps, because this data is going to only take you so far.

Alright so Electroneum is a brand new coin, with the blockchain launched within the last couple of weeks. The coin was launched by a British team, headed by a successful and wealthy individual, backed by more successful and wealthy individuals, with much pomp and noise. They had a standard bitcointalk launch post, in which they paid the price for community assistance in blowing their trumpet, they have a fairly lively twitter and facebook, and in general are doing all the right things and doing them very well.

The launch process however was marred by some security issues, causing them to delay access to the presold coins. The coins were presold in the ICO (Initial Coin Offering) at $0.01 each, and they sold $40m worth. That means at the point when all these coins are available to their buyers, there are going to be some 4 billion coins in circulation, plus whatever has been mined since. Keep that in mind, we’ll come back to it.

So, they are working on getting the coin onto some exchanges, but right now they only have Cryptopia. The current price there is floating between $.04 and $.05, which is up pretty strongly over the last couple of weeks. That means in theory Electroneum is already trading up 5x the price that it was put at during the prelaunch. Of course, it’s not that simple. If you take a look at the order book at Cryptopia you will notice that the total buy orders for Electroneum cover roughly 200m coins, before taking the value right down to zero. That means that as soon as those prelaunch coins go up for sale (and make no mistake, many will try to sell), the value will correct to roughly zero. This is why Coinmarketcap are currently showing a zero as the market cap. If you times the 4bn coins by the current value it creates the illusion that Electroneum has a market cap of $180m, which would make it the 51st biggest crypto currency out there, which simply isn’t true as those 4bn coins are not circulating, and Coinmarketcap were not going to let Electroneum cheat the system like that.

The truth is, the circulating supply of coins right now is unknown, but its probably less than 500m and it’s very important to keep that in mind. I’m not even sure where all those coins came from- miners maybe? There is demand for these coins, and rightly so, the company pushing them is doing all the right stuff to increase their value. However, the value is being artificially inflated by an artificial lack of supply. Soon the flood gates will open, and supply will outstrip demand, and the price will correct.

I bought in a week or so ago at around $.025c, and i’ve been mining. I’m holding some thousand of coins, not a lot. I’ve roughly doubled my money on them, which is always nice even if it’s just pocket change.  However I think that I need to sell them before they announce that the ICO coins are being made available, because otherwise I’ll be able to kiss those gains goodbye. I’ll probably sell early next week. Then i’ll rebuy after the inevitable price crash. I should market price will stay over the ICO price, but we will see, as if drops much below it indicates no confidence and a failed launch.

So, I think Electroneum is a great coin. I think they did a great ICO. I think they’re hiring PR companies, pushing mobile mining, and have a great image. But I also think it’s important to not get too excited just yet, and maybe wait until the whole circulating supply is really circulating before you buy in, otherwise you may pay far too high price.

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