I tend to avoid discussing the price of ICX, either here, Twitter, Telegram, or anywhere else ICON is discussed. I do this partly because I don’t think it’s particularly constructive, but moreso because I generally don’t care what the price of ICX is today. I didn’t really care yesterday, and I probably won’t care tomorrow.
But I’m making a rare exception with this post.
So, if you’re interested, here are my thoughts on the price of ICX.
This isn’t the case just for ICON, but blockchain in general.
We’re still in early innings. The technology takes time to build, and even longer to adopt. Many people invested in blockchain because they believe it to be revolutionary product, but they also expect revolutionary products to appear overnight. That just doesn’t happen. Technology that changes the world takes time to materialize. That’s just how it goes. ICON has existed for two years. That’s a blink of an eye in the grand scheme of things.
Meanwhile, the initial phases of the internet began in the 1960s. Most homes didn’t have access until the 1990s. I’m not saying the timeline for blockchain will mirror the internet, but you get my point.
If you understand the ICON project, you know it’s long-term value will increase through enterprise adoption, leading to mass use of the network — not retail speculation.
Many were spoiled by the 2017 mega-bull market, which was likely an aberration. I don’t mean our finances were spoiled (although some may have been); rather, our attitude and perception was. It was a moment in time fed entirely by speculation, but quick gains became the rule for many, rather than the exception. That expectation has altered our perception of what we should expect when it comes to a return on investment.
Will retail speculation flare up from time to time? Most likely. But speculation tends to fade fairly quickly, leaving you back where you started from — or worse.
It’s better to zoom out — that’s where real value and wealth are. But that requires patience.
Price =/= Fundamental Value
I’ve heard people point out that if the market thought ICON was a good project, that would be reflected in the price.
Sometimes that’s true, a lot of the time it isn’t.
Here’s a chart of 8 tech companies and their stock price history, with a focus on their high at the peak of the Dot Com bubble (1999–2000), their subsequent low (2001–2002), and their value today.
Priceline definitely wasn’t worth $575.64 based on fundamentals at the time, but it probably wasn’t worth $6.60 either. The same goes for pretty much every other stock on this list.
In other words, the market can be wrong. It can sometimes be very wrong. Sometimes it goes up; sometimes it goes down. Sometimes it widely overvalues a company, sometimes it widely undervalues one. That’s just how it goes.
Is crypto the same as the stock market? Of course not — less liquidity and a lack of standard metrics to measure fundamental value have generated far more uncertainty and volatility. But the comparison can still be informative and we can still draw lessons regarding the nature of market behavior.
Some of those percentage decreases will look familiar to ICON investors. We probably feel a lot like those who invested in Amazon at the top. Amazon decreased more than any other company on this list (other than Priceline) — that must mean it was the worst company, right?
I’d argue that isn’t the case, as it’s now one the largest and most successful companies in the world. Even if they weren’t perfect at the time, they clearly were doing something right.
Meanwhile, Priceline — which dipped 99% — (probably because they missed some deadlines and didn’t market enough) now has nearly 3x the market cap of EBay, which fell “only” 75%.
Even if you don’t buy this and you think the stock market shouldn’t be used as a comparison, let me ask you this.
ICON is, as of this writing, 98% down from it’s all-time high (still better than Priceline, FYI!). Some may say (and have said), “Well, TRON, NEO, and IOTA are only down 94%, 95%, and 95%, respectively.” Let me ask you this: if ICX were currently at 60 cents (“only” 95% down from all-time high), would your concerns about the price go away? Would your demands for certain activities from the team dissipate? Probably not.
So if a 3% difference isn’t enough to change your concerns, it probably isn’t enough to justify the idea that ICON is a fundamentally “worse” project than those you are comparing it to.
If you hadn’t noticed, the entire crypto market went into a bear market. That means ICON is going to suffer just as much as the market as a whole. Did it go down a bit more than other cryptos? Sure. But it also went up a lot higher (in % terms) than other cryptos during the bull run in 2017. I’m not sure it would have made sense to argue ICON was better than all of those projects based on its price at all-time highs; I don’t think it makes sense today to argue it’s worse than other projects when it’s near its all-time low.
It’s not 2017
A lot of people still expect 2017-style price action, where news tidbits, partnerships, exchange listings, rebranding, or announcements of announcements would cause the price of individual tokens to skyrocket overnight.
Don’t get me wrong — those were good times! But they were a time where the market was filled with liquidity and in an environment where people had less time to actually do deep research on projects because they were too busy chasing green candles. So instead of actually doing the research on fundamentals, people bought based on hype. Then those people told their friends about their gains. They became “experts” and would make recommendations as though they were the Warren Buffett of crypto. It got to the point where people were buying not only because of news, but because they assumed other people would be buying as a result of that news.
If you were involved in crypto in 2017, you likely remember the “Antshares” rebrand, when it became “NEO.” Sure, there was a strategy adjustment that came with the name change, but the rebranding led to a ~50x increase in value for the project in just a few weeks. Did the project fundamentals improve 50x? Not really. But that didn’t matter. People were excited!
Similar behavior carried over to influencers. A YouTube video from a popular account could cause the price of a coin to pump. Cryptic tweets implying something amazing generated many green candles. Announcements of announcements caused communities to lose their minds with anticipation.
The problem is that the people who bought tokens based on these “market signals” were likely buying at the top. When the party ended and their portfolios plummeted, they walked away.
So now that they’re gone, that’s primarily left the crypto community with individuals who invest in projects not due to short-term hype, but long-term prospects instead. If we didn’t see the long-term value in projects, we wouldn’t be around (what would be the point?).
However, despite their understanding of the fundamentals, a lot of people are still stuck in a 2017 mentality. They still expect price pumps when a new partnership is announced, a new exchange lists their coin, or a prominent YouTuber (although definitely less prominent than they used to be!) hypes their project.
Do these pumps still happen from time to time? Sure. But they’re typically short-lived and don’t do much to generate sustainable, fundamental value for a given project.
The top justification I hear for why the price of ICON has decreased is the lack of retail marketing. (The other is “missed deadlines,” the most recent of which was probably sometime in Q1 of 2018.)
The section directly above provides a good amount of my perspective on “marketing””, but I’d like to elaborate a bit.
Those who believe the ICON marketing has been insufficient yearn for a marketing style from the ICON team more in line with what projects such as TRON have accomplished.
Well, as of this writing, TRON is down 94% from it’s all-time high. Few would debate that Justin Sun (Founder of TRON) is an excellent crypto marketer — but even his special sauce hasn’t been able to save the price of the token.
Several months ago, ICON promised to step up their community engagement and marketing efforts (including a rebrand!), in response to criticism from contributors. More Medium posts with partnership announcements started popping up in my notifications; Min Kim and others started engaging more in Telegram; the team got more active on Twitter; a newspaper was launched to provide news coverage of ICON; Ricky Dodd’s started doing AMA’s.
And then the price went down.
Don’t get me wrong, the steps they’ve taken have been great for the project, and I’ve greatly enjoy all the new information and insight. But that doesn’t mean it has an impact on price — at least not now.
From time to time, I’ll stumble into other crypto communities just to see what the sentiment is (spoiler: typically not good). It usually takes about 5 minutes of browsing a reddit community or Telegram channel before I see someone start to talk about the lack of marketing being the problem. If you think I am exaggerating, here is what a few minutes of reddit searches for random projects (those that popped into my head) brought:
Marketing update? (LISK)
Why have a legal fund without a marketing fund? (RavenCoin)
Finding all those links took me less than ten minutes. I think you get the point.
Psychologically speaking, people tend to look for an explanation for why the price is moving, and they like to think it’s something that can be easily changed. We just need better marketing. If only we had a couple more exchanges. It’s the whales suppressing the price — if only they’d stop.
You can’t always control things. While it would certainly be good if we had better marketing, more exchanges, or fewer whales, that doesn’t mean you’ll be rich tomorrow.
While I don’t have concrete data to prove this, it’s my belief that most price action in the crypto market today is caused by active short-term traders.
They buy because the chart looks “good” (based on whatever metrics they use). They sell when the chart looks “bad” (or if they’ve captured the profit they hoped for). Then they go look at a chart for a different project. They’ll tweet things saying “wow, this coin is garbage!” but only in the context of the “chart” and not the actual fundamentals of the project.
Will we see 20% pumps from time to time? Sure. And then profit targets are hit, traders sell, and the price falls back to exactly where it was before. This has happened to ICON several times over the past several months. It will likely continue to happen.
Until retail investors come back to the party (or mass enterprise demand kicks in), I think most price action basically boils down to the often-repeated adage — either there were more buyers than sellers on a given day, or there were more sellers than buyers. It’s boring, I know — but it’s the current state of the market (in my opinion).
As stated in the beginning of this article, I’m not focused on retail speculation. If it comes, great. I’ll feel good to be rich on paper, but I won’t expect it to last.
That means I don’t get excited about 15% pumps in price. I don’t even get excited about 50% pumps.
What do I get excited about?
Any piece of news that increases the odds that the ICON network will be valuable over the long-term. That means partnerships with enterprises. That means joint ventures with other companies or projects. That means intriguing DApp projects. That means quality ideas for ecosystem expansion projects. That means quality P-Rep candidates. That means an uptick in genuine transactions on the ICON network. That means ICON participating in blockchain events and conferences. The list goes on.
Recently, it became apparent that the government of Seoul would be using the ICON public chain for a portion of their government services. News coverage didn’t explicitly point out ICON’s role in this. Many were upset by that.
But the news itself should have made us happy — the coverage of it shouldn’t have really mattered.
Just think — if in three years, the Seoul government is using ICON and ICX at a significant level (meaning possibly millions of transactions per week), will we care at all how that news was announced in 2019? Probably not. We will likely be too busy watching the price of ICX go up as a result of mass usage from a large metropolis.
“So am I helpless?”
After reading all this, you may feel a bit helpless — a buoy simply bobbing in an ocean of market forces, being pushed and pulled by the tides of an increasing and decreasing price.
Fortunately, there are ways you can have a positive impact on the long-term price of ICON:
- Stay informed — The success of the ICON network (and project) is dependent on good, stable governance of the ICON network itself. P-Rep elections are critical in this. If we fail to elect competent and diverse P-Reps; if we concentrate all our votes on just a handful of candidates; or if we allow cartels to form, we will be neglecting our responsibility as ICONists to elect P-Reps who will act in the best interest of the network. When you stake to earn your rewards, make sure you’re voting for P-Reps you believe in.
- Educate others — This is the type of “marketing” that can make a difference. Do what you can to educate those within the ICON community and crypto community at large. Talk about why you think a P-Rep is doing a good job (or bad job!). Write a post on reddit proposing an idea for a DApp you have. Reach out to developers in the blockchain community to encourage them to build on ICON. Answer questions by those who have questions about the project. The list goes on! The more information you put out, the better!
- Build — ICON has created an economic model that rewards anyone who contributes to the network. Beyond simply earning rewards for voting for P-Reps, there are many other opportunities for earning rewards in exchange for contributions. Perhaps you have an idea to make a website that teaches developers how to build on ICON — apply to for an ecosystem expansion project (EEP). If you’re EEP is among the Top 100 selected by ICONists, you can earn rewards to fund your efforts! Perhaps you’ve worked in the insurance industry for your whole career and have a proposal to spread the word about ICON within the companies you’ve worked for — it doesn’t hurt to submit your idea!
These are just a few ideas — but they’ll all have a positive impact on the long-term price of ICON. Even if you can’t see the impact immediately, these activities and others like them will be far more productive than yelling at ICON Foundation members on Twitter, replying to reddit threads with the phrase “REKKKTTTT”, or getting upset every time you hit “refresh” on your crypto portfolio tracker.
At the beginning of this piece, I said I didn’t care what the price of ICX was over the short-term. I obviously care over the long-term — that’s partly why I am here. But I know true wealth is built over years, rather than months or weeks.
So I’ll worry about the price of ICX in five years. But I certainly won’t today.