IOT Chain (symbol ITC) is a token that is rather small at the time of writing, not in the top 100 in terms of market cap. Some investors believe small and unknown tokens are an opportunity because their absolute value in dollar terms is “low”. Is that the right way to look at it? Let’s do an evaluation, and derive what is important to watch when analyzing ‘small’ or ‘unknown’ tokens.
When it comes to IOT Chain we found this very interesting summary of what it offers and what it stands for:
Though it is enticing to research the details around the technology we believe from an investor’s point of view it is not the most important thing to watch. Obviously the technology has to be decent, for sure, but it’s not the number 1 criterium.
What we are watching is the ‘project development’ section outlined above. In particular bullet 1 is critical for us. It indicates intrinsic value. Some argue that intrinsic value does not exist with cryptocurrencies but we tend to see things differently. As explained in our spot-on ethereum forecast last May (we were the first in the world to publish a cryptocurrency forecast in the public domain) we based our forecast our own vision of on intrinsic value which is based on real life usage.
Similarly we believe investors with an interest in IOT Chain should closely follow how many deals this startup closes with companies, and how many users they will have on their wallet (bullet point 3).
The guys at Medium.com share a similar viewpoint though they approach it from a technology perspective. Although our viewpoint takes a different angle our common ground is the outcome which is real life usage:
The business model and technology concept are both sound. The team has relevant experiences and resources in the Internet of Things industry. The project valuation is also reasonable. The biggest risk is the team’s weak spot on the blockchain technology front. Whether the project can develop according to the blueprint and cope with the industry trend remain to be a major concern.— — Huobi Blockchain Application Research institution
The price chart of IOT Chain shows an amazing runup, only to retrace 50%, and that is an interesting level for investors seeking exposure to this token. This does not imply we are flashing a buy signal though, as the points made above are the real important criteria to consider before buying.
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