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