- >Crypto.com Has Now Dropped 50% in Value Despite Hitting 5m Users
Crypto.com Has Now Dropped 50% in Value Despite Hitting 5m Users
Crypto.com is one of the faster growing exchanges in the cryptocurrency ecosystem. Earlier this year we saw the underlying token that fuels their ecosystem (CRO) jump by 700%. However, in the last month we saw a significant retracement of 50% despite the company displaying a multitude of signals showing strengthening fundamentals. For example, Crypto.com CEO Kris Marszalek announced on twitter in early October that the platform just hit 5 million users. Here at CryptoVantage, we’ve written extensively on Crypto.com. We’re enjoying following the journey of Crypto.com as they build one of the easiest to use platforms for crypto beginners despite some significant setbacks.
Keegan Francis | Dec 4, 2020
Five Times More Users in One Year
To put the five million user milestone in perspective, Crypto.com hit 1 million users in September of 2019. That is a 5x growth in users over the course of just one year. In the world of business, users are currency.
This explosive growth in the number of users only strengthens the foundation upon which Crypto.com is founded. Crypto.com boasts an ecosystem of lending, staking, borrowing, and exchanging. The most users interacting with Crypto.com’s products the better it is for every existing user. The question then becomes, how does Crypto.com keep this momentum of adding users to its platform?
Launching in Canada with eTransfer Capabilities
To add to the list of accomplishments of Crypto.com, they’ve recently added the ability for Canadian’s to eTransfer funds onto the application. For the readers that are not in Canada, eTransfer is the simplest way to move small amounts of money around in Canada. You can transfer up to $10,000 instantly depending on your bank, and your personal finances situation. The ability to eTransfer money is one of the cornerstones of success for another Canadian crypto exchange, ShakePay.
Canada will be one of the largest announcements yet to come out of Crypto.com this year. They’ve announced several times that they are on track to deliver the signature Crypto.com VISA debit card by the end of the year. Most Canadian users are hoping that their card arrives by Black Friday so they can earn cashback on the already discounted deals offered by North American retailers. Regardless, the ability for Canadians to eTransfer funds directly into the Crypto.com application is a huge win for the company.
Latin America to Follow in 2021
One of the largest unconquered territories in the crypto world is Latin America. It is prime for adoption due to the level of corruption and currency manipulation amongst governments such as Venezuela. One way that Crypto.com can keep their momentum of adding users to their platform, is by targeting zones that are primed for adoption. Primed in the sense that people are suffering economically from the decisions made by the mismanagement of national currencies. It is already well known in the crypto world that people in these nations are forced to turn to cryptocurrencies as a more stable currency than the currency provided by their government.
Latin America is where a massive amount of traffic already takes place on decentralized bitcoin exchange localbitcoins.com. The problem is that the bitcoin sold on this platform is marked up significantly, only furthering the monetary pain experienced by those who are already suffering from inflation. While something is better than nothing, Crypto.com stands to offer an amazing alternative for Latin America by drastically reducing the barrier to entry, both in price and in difficulty.
Ever More Ways to Use CRO
Crypto.com is constantly creating new ways for their user base to use their core token (CRO). At a high level, Crypto.com consists of three products, their DeFi wallet, their exchange, and their core application. In each of these applications, Crypto.com makes it easy, and obvious to lock up and use CRO. Their syndicate events on the exchange allow users to purchase various cryptocurrency at a discounted price, usually 50%.
DeFi has been a notoriously difficult thing for the average user to understand. If you do understand it, you can participate in DeFi using their non-custodial DeFi Wallet. However, if this is too complex for you, Crypto.com has provided a one-click solution for participating in DeFi. Using either the core application, or the exchange, you can utilize their latest offering, Supercharger. This allows you to deposit CRO and earn DeFi tokens.
Significantly Lower Earn Rates Upsets Users
Last month Crypto.com announced that it was drastically lowering the earn (or staking rates on the exchange) for its native CRO token. The rates plummeted from an industry-leading 18% to just 4%. Users were understandably upset because there was no warning and the rates were reduced so significantly. Management would eventually backtrack and increase the rate to a more reasonable 6%.
One of the biggest criticisms against the change is that you can actually get a slightly better rate of return for staking Bitcoin on Crypto.com instead of CRO, which is perplexing to say the least.
The Current Demise of CRO Token
For the crypto veterans out there, a 50% drop is really nothing to get discouraged about. Albeit, the drop could have taken place at a better time. There are two metrics worth looking at when observing the price decline of CRO. The price with respect to the USD, and the price with respect to BTC.
Many crypto veterans prefer to optimize their portfolio to maximize the amount of BTC in their wallets. Others who are more accustomed to the USD prefer to optimize USD. Given the momentum carried by Crypto.com, it is reasonable to assume that the price of CRO will recover with respect to the USD. However, the momentum of Crypto.com pales in comparison to the momentum carried by Bitcoin. Therefore the CRO/BTC price may never return to the levels it had achieved in late August, 2020.
The True Value of CRO
Looking back on 2020, CRO has been through a rollercoaster of price movements. To summarize, up 700% then down 50%. One of the reasons for the extreme volatility is the user dissatisfaction from long term supporters of the platform. The general sentiment is that communication could be better, and the MCO/CRO swap that took place in August was unfair to early supporters.
So the question on many users’ minds is what is the true value of CRO? Is it $.20 where it was at its peak? That would mean that CRO is currently undervalued. Perhaps the level that it is at now is more sustainable in the long run for both the users are Crypto.com. It does seem that the more features there are to use CRO, the higher the theoretical value offering. Crypto.com shows no sign of slowing the rate at which they add new features.