Tron Rebounds 100% From Last Week’s Low Amid Controversy
Tron has been among the biggest gainers since last week’s market crash, but controversy surrounding its founder has divided investors about the coin’s true potential. Somewhere in between the hype and controversy lies the truth about Tron’s long-term value proposition.
TRX Price Levels
After bottoming out around 4 cents USD on Tuesday, Tron’s TRX token more than doubled to 9 cents over the weekend, according to CoinMarketCap. The alternative cryptocurrency was last seen trading at 8 cents for a total market cap of $5.3 billion.
More than $600 million worth of TRX was turned over in the last 24 hours, with bitcoin and Ethereum purchases driving the lion’s share of the market. The Binance exchange accounted for roughly 56% of the transactions.
Even with the latest rebound, Tron is trading at a fraction of its all-time high of 27 cents. The market has been in a gradual state of decline ever since.
Tron: Hype or Reality?
Tron took the world by surprise earlier this month as its market cap reached $17 billion seemingly over night, putting it among the top-ten cryptocurrencies. Although the gains were largely attributed to founder Justin Sun’s masterful marketing campaign on social media, the company announced big plans to partner with some of China’s most prominent companies. This included a deal with Baofeng, the so-called ‘Chinese Netflix‘.
This partnership makes perfect sense for Tron, which is trying to create a blockchain network for digital content producers that will help them sidestep expensive middlemen like Google Play or Apple Store. This would have the effect of turning digital content creators into their own distributors.
Sun has also been linked to Jack Ma, the Alibaba chairman who wields tremendous power and influence in mainland China’s business community.
The news surrounding Tron hasn’t been entirely positive. The company has been embroiled in controversy over allegedly copying and pasting content from other projects into its whitepaper. Allegations of plagiarism came from Bedeho Mender, the founder of BitTorrent client JoyStream, after he discovered that Tron’s English-language whitepaper had copied the work of ICOs like Filecoin and IPFS.
Sun, who has been accused of plagiarism before, said the similarities were due to an inaccurate translation of the original whitepaper, which is written in Chinese. The allegations dealt a swift blow to TRX, which has been in a state of decline ever since.
The company’s chief visionary has also responded to rumors that he cashed out billions of dollars’ worth of TRX tokens. Although he outright denied selling the coins, not everyone is convinced.
Beyond the whitepaper controversy and Sun’s aggressive marketing tactics, the real issue value investors have is the viability of the project. Although this is no different than the scores of other coin offerings, Tron has made a bold promise to essentially revolutionize the world wide web. In a Jan. 5 Periscope session, Sun even stated that his project intends to go “far beyond” bitcoin or Ethereum.
Tron is certainly entering the market at the right time. Demand for digital content is surging in China, a trend that is expected to continue as policymakers prioritize growing the middle class. The real question is whether TRX will emerge as a viable currency to pay for digital content. How investors answer this question will reveal how they really feel about the project’s potential.
That being said, the project still lacks a bona fide product, even as the team continues to make regular updates to the GitHub page. Some developers have also commented on mistakes in the open source code. While these issues are likely to get fixed, they provide little comfort to investors who are already on the fence about the project.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.