On September 15, the Peercoin price fell out of a major slump, rising nearly 40% in less than a day. The price movement was spurred by Peershares developer Jordan Lee’s announcement that NuBits–which he claimed would eliminate cryptocurrency volatility–would release on September 23. After remaining at ~151,000 satoshis before Lee’s announcement, the Peercoin price rocketed to a high of 401,176 on September 20. Over the next two days, the Peercoin price declined a bit, falling to 371,532 satoshis on September 22. Despite the small decline, the Peercoin price remained quite high on the eve of the NuBits release. However, it turned out that NuBits would not increase Peercoin’s standing among altcoins. As a result, the Peercoin price plummeted to 269,265 satoshis the day of the release. The Peercoin price briefly recovered on September 24 but resumed its decline on September 25. At press time, the Peercoin price was 266,647 satoshis.
CCN warned that investing in Peercoin based on speculation that NuBits would increase the Peercoin price was a bad idea because Peershares had released virtually no details about the project. Unfortunately for Peercoin speculators, we were right.
Though developed by Peershares, NuBits is a completely separate altcoin–one that is trying to eliminate cryptocurrency volatility. Far from increasing the value of Peercoin, NuBits could actually hurt Peercoin (among other alts) if it proves successful. The one silver lining in the NuBits announcement was that NuShares, the voting mechanism that also secures the NuBits blockchain via proof of stake, will distribute dividends to NuShareholders using Peercoin as the payment medium. Thus, Peercoin could receive buy pressure on exchanges if there is demand for NuBits. However, that buy pressure would only appear if the cryptocurrency community begins migrating to NuBits. But it is unclear how much this would affect the Peercoin price, as well as whether or not the potential boon on exchanges would offset the sell pressure created by people leaving Peercoin for NuBits.
The recent Peercoin price fluctuation exemplifies how volatile cryptocurrency market caps become on the slightest hint of positive news. Altcoins have potential to introduce radical innovations to the cryptocurrency landscape. Because they do not have the infrastructure or mainstream reputation that Bitcoin has, they can afford to experiment with different features to find out what works and what doesn’t. Unfortunately, many in the altcoin community seem preoccupied with making a quick profit. Coins rise and fall daily at the whim of investors with deep pockets. Increasingly, it is becoming difficult to distinguish the wheat from the chaff.
Disclosure: The author does not have any investments in or affiliations with Peercoin or any other coin discussed above.
Images from Shutterstock.
Last modified (UTC): September 26, 2014 04:15