Imagine disputing the above in traditional markets?
Only in crypto I hear weird arguments about price of a token- driven by extreme bag biases, tribalism, ideology or at times idealism.
Let us check a few charts-
Btw charts don’t predict the future but they are very useful tools. They a) show historical data, b) helps in pattern recognition (if any & if there is enough breadth & depth), c) helps in drawing different types of correlations (if any), d) gauging sentiment, freed, greed, momentum, e) making comparative analysis such as between prices of assets, ++++
$POKT making lower lows & still on a downward trend against $ANKR.
I compare with $ANKR because that’s the token closest to $POKT at the moment. Once Lava, dRPC and other similar protocols have tokens, the game will get interesting.
Regardless, assets don’t have to be identical to make relative price comparisons. Such as comparing $BTC’s price & $ETH’s, comparing one asset VC $BTC or $ETH, substituting $USD with any other asset. Its the investors way to gauge- where could I have got the maximum bang for the buck.
And it’s certainly not $POKT until now against any other asset.
Since my last blog on $POKT price action on 25th of April, $POKT made 3 new lows with retests. Going back further- My first alert about concerning $POKT price action was in Feb, 23 when I observed $POKT’s lack of traction versus the trending trad + crypto market. Since then I kept sending alerts whenever I sensed bad signals VS the general market. I have recorded those in my last blog , in case anyone in interested.
No crystal balls, just a good sense of public markets having skin in this game 24X7 for a few years.
The following are more recent, from May-
$POKT make new lows since the burn announcements, which is kinda unheard of.
Caesar, are you rubbing salt??
My objective is to re-sensitise that-
a) $POKT’s price action is very abnormal as I have been ranting since Feb, 23.
b) Market is still not buying the story, that I first said in my last blog.
Whether something more or different needs to be done, that’s for the foundation and the DAO to decide.
The market will continue to publish the daily scorecard and I will continue to monitor it calling a spade a spade.
Before ending this section- let me share that I wouldn’t trust the volumes anywhere except on Ku, Gate & Bybit. Those are the only exchanges that have declared their “proof of reserves”.
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Here is the back of the napkin list of catalysts for price action of ‘A token’ in the order of relevance (and I mean tokens only, doesn’t apply to equities or other assets) :
Health of Macro (capital market liquidity, real economy, war, pandemic, etc)
Health of crypto space (liquidity, regulatory mood, scams, etc)
Robust machinery to drive narratives (token specific)
Liquidity/Capital Markets (token specific)
Tokenomics (Price friendly tokenomics)
Fundamentals (Product Market Fit, Usage, Growth, Revenue, etc)
Yes, you read it right- “FONDAMENTALS” takes the last spot.
Absence of #6 is not a showstopper to positive price action of a token. The presence of which is also not a guarantee. Check my last blog for examples of tokens.
Moreover fundamentals can have different meanings for different people. For few $DOGE has fundamentals being a premium meme token and for others it’s trash. GOLD fits in the arguable category.
Just to remind- we are NOT talking idealism here, and judging what is right or wrong.
DIS IS DA MARKET!
Tying all this back to $POKT price:
We can all agree ‘for now’ that $POKT checks box #6.
After Dec 2022, #1 & #2 have been net positive to neutral. Equities & crypto are up from the lows, except $POKT.
$POKT sucks at #3. Let us wait & watch how the newly hired PR firm & Head of Marketing performs by Q3. Personally I am not a fan of trad PR firms in todays marketing era but I am curious to see what a ‘crypto native PR firm’ does. That’s new to me.
$POKT sucks at #4. I am curious to see what happens to $WPOKT, the plan to funnel liquidity & which CEX lists $POKT next. Having $WPOKT in place doesn’t automatically guarantee healthy liquidity. Plus with the current performance, it will be a struggle to get listed on exchanges such as Binance, Coinbase.
Btw until $POKT is listed in derivative markets, we would’t know the fair price of $POKT.
Imagine if there was a way to short $POKT at this moment??
#5 =/ ponzinomics as few would assume. $ETH 2.0 has great fundamentals & unmatched tokenomics, and I have cited examples in my last blog of tokens with solid fundamentals but poor price action due to weak tokenomics.
I wouldn’t say $POKT sucks at #5 anymore but despite ongoing reduction in emissions & introduction of burn in V0, tokenomics continues to be an achilles heel.
Check the start of the blog where I say how unusual it is for token price to yawn & make new lows after burn announcements.
I do cover my thoughts about inflation later in the blog, keep going.
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I tweeted once that in order to survive in financial markets, I had to unlearn what my econ professors who were old school Oxbridge PHDs and had boomer roles such as Chief Economic Advisor to nation states had taught me.
Economists sound smart and can win intellectual debates, but they don’t make money in markets because they are indoctrinated by theories such as “price is a lagging indicator”.
Markets are speculative in nature and therefore forward-looking.
And that is even more relevant in the case of growth assets.
Therefore those who had waited for traditional valuation metrics such as P/E (price to earning) ratios, DCF (discounted cash flow), etc to become favourable before buying the tech stocks, Tesla, etc, dominating the global financial markets today, missed most of the upsides.
Crypto is leveraged NASDAQ and on steroids. The hype gets way ahead of fundamentals by traditional standards and that manifests in price.
Who would have bought $BTC and $ETH early going by the principle of “price is a lagging indicator”? Even by using token valuation models that have been designed today by crypto natives.
And who would touch most of the tokens being traded today?
This takes us back to-
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Double digits inflation until Aug and gets to 8/8+ in Feb, 24. V0 is scheduled for Q1, with buffer realistically sometime in Q2. This is not FUD fellas, this is contingency planning 101. And given the recent attrition of a core team member from the tiny protocol team controlled by one ecosystem partner, there are added reasons to be conservative with launch timings.
Therefore ‘Valhalla’ for $POKT’opians which is tokenomics & demand that support mint = burn could still be 12 months away.
That’s a lifetime in crypto, specially given $POKT’s poor rapport & performance in the market.
A quick reminder of a few basics:-
a) Price is a function of supply & demand. Supply is 100% controllable and demand has dependencies, therefore challenging.
The 600k tokens minted daily have to be absorbed somehow for price to be able to go north instead of south. Otherwise the math fails even at a very rudimentary level.
And the big variance allows this to happen on a daily basis-
That’s how hard your sacred coin is getting dumped on Ku, turning your heavy bags into leaky ones. Just a visual representation from one exchange.
This is despite all the burn narrative and everything else.
b) Controlling supply doesn’t come at the cost of increasing demand. Don’t use one to explain the other.
c) Emissions = Cost to the Network. Do I really have to explain how increasing efficiency in turn increases competitive advantage in a crowded market?
And btw for those who blame the sellers & associate market selling $POKT to poor principles, I wrote this tweet specially for them.
I am not going to be precisely tell what to do this time with inflation, but I have to say that pro status-quo side should come up with different reasons to defend their stance. Unless it has become a matter of ego for a few or something.
I will repeat what I have said in forum in the past- It seems like a few players are financially motivated to not cut emissions and they are holding the network hostage.
Ah you are smart anon and you want to see Web3 Infra Stack instead. Here you go-
So how is $POKT doing VS the vast majority??
Erdogan, President of Turkey defends continuous devaluation of Turkish Lira to propel economic growth. That’s a quite unprecedented policy and completely delusional. As a result, he has made the Turkish economy significantly weaker, the economy that he himself built when he had come to power.
I get similar vibes from $POKT’opia.
Before I end this section, let me caution people about pulling inflation numbers from just anywhere. I see that as data integrity issue to defend one’s view point.
Refer protocol websites/resources or use Messari. There could be differences of +-1% and that’s fine.
So to repeat myself- I want to see better arguments defending status quo in emissions.
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To end-
Idiosyncrasies of the crypto space with regards to price are all highlighted in my last blog.
I can’t think of many tokens, whose prices did not trend with the market for ‘an extended period’ and then they rose from the ashes like a Phoenix.
Several tokens & protocols don’t get extinct either, just get pushed into a state of oblivion.
Crypto is a subset of the attention economy.
Death is not imminent but dormancy could be, specially in a market thats going to remain inundated with hundreds & thousands of tokens.
Don’t let $POKT go there please-