"Wen Moon" - What actually influences price movement?

General / FAQ
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I feel like our community has general frustrations about price movement, so I took some time to brainstorm what I believe influences the market. As a community of investors, we all want this project to succeed and the best way is to contribute value in ways you think can positivity influence the project.

  1. Project Valuation
    People buy with the expectation that price will go up (short/longterm) which is based on their personal perceived value of project. Perceived value is based on product market fit, product growth and utility, market presence, and price activity. It may be obvious but it’s important to note that value is relative to the perceived value of other projects and investments.

  2. Product Market Fit
    Our product is the ONLY privacy-preserving smart contract platform that supports the creation of decentralized apps with privacy protections. Our market fits into the categories of: crypto, smart contracts, privacy, defi, nfts, interoperability, cosmos ecosystem, high-growth small cap alts. How we are perceived can vary based on the impact of our product, awareness footprint, and how were compared to other projects within each of these market areas. If the market collectively agrees that defi/smart contracts must have privacy, we’d be in for a good time.

  3. Network Growth
    Network utility is based by the actual quality and usefulness of delivered products (technical, UX/UI design) and is driven by a strong the developer community who builds useful products/dapps, educators who teach users how to use new and existing products, and users actually deciding to use the product vs other options. Perceived project growth are enabled by analytics and KPIs that help visualize growth and a clear project roadmap that shows upcoming milestones

  4. Market Presence
    Market presence (“Marketing”) comes from awareness driven by social media outreach, community partnerships, influencer buy in, advertisements, VC relationships, word of mouth and backroom convos. Presence spans across market segments and geographies. Increasing presence in any of these categories come with a price (time, human resources, capital) and their own unique benefits and challenges.

So what exactly drives price activity? Price activity comes from traders dictating the market price they are willing to pay for an investment and is driven by supply and demand imbalances.

  1. Market Supply
    Market supply contraints boost price and is caused when an unwavering community collectively decides not to sell (staking/high bonding ratio) and can be optimized by protocol parameters controlled by governance (inflation rate, pool funding, mint/burn mechanisms). Incentives for product growth (yield opportunities) and network security add to supply and should be balanced.

  2. Market Demand
    Market demand increases when more traders and investors want to buy. Traders find projects with high liquidity/volume, growth potential, and exchange accessibility more attractive.

  3. Accessibility and Liquidity
    Accessibility to exchanges makes it easier for users to purchase (country specific) and liquidity comes from market makers who form relationships with trusted entities due to risks involved. Every project fights for listings and liquidity, so these factors often become a bottleneck that is prioritized by network relationships, growth potential, trading volume, and kickbacks (node delegations, staking rewards, % equity, etc).

  4. Market Stability
    Altcoin market is tagged to Bitcoin, so market factors influencing Bitcoin also influences the entire market. Market stability allows people to trust even riskier alts.

  5. Price Momentum
    Price momentum is often equated to how well a project is doing but is influenced by a number of factors, including luck and good timjng. This is lead to an unfair representation of how a project is developing in other areas that is discouraging to people actively building the areas they can control. It has a strong impact on the general sentiment of a community. Everyone wants viral price momentum that gets everyone talking (Doge Safemoon) and can happen to any project. It is certainly possible given the overall strength of our technical fundamentals and unrealized market potential.

A lot will probably seem obvious and I’m sure I missed a number of things, so I’m interested to hear what others have to add!

Tldr;
Stake, accumulate, chill.
HODL supply and work to grow demand.
Be constructive and supportive in community.

4 Likes
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Terrible formatting, would not read.

Appreciate the write-up mate!

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Wow! Thank you for writing that up, it is a lot of food for thought. I think you are right on target. A simplified question might be to suppose you had money to invest right now. Would you stake $SCRT?

It’s a complicated question. Most people who have money to invest in crypto might not have it on the sideline. And if they are here and have had money to invest they probably have some stake in $SCRT already. How would you convince them to put new money into the project?

I am interested to see what happens with the upcoming bridges. If a lot of money comes over as people are given the opportunity to diversify with smart privacy, then that would be a very positive signal. If there is little uptick in volume then I would be tempted to wait for broader market acceptance.

Basically what you are asking is how to create price momentum for a solid long term project and I’m not sure much more can be done? There is a very active community.

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