Got MCT?
Master Contract Token (MCT) was airdropped into NEO wallets that had held any amount of NEP-5 tokens on or before 8 May 2018 at 00:00 GMT (ending with NEO block 2240482). 1000 MCT were dropped for each different type of NEP-5 token held in each wallet.
MCT - Sell, Buy or Hold?
Suddenly you've found that you're unexpectedly the proud owner of 1000 MCT. What should you do with it? Or perhaps you've found that you're not one of the 404453 wallets which held any NEP-5 tokens at the right time (maybe you were keeping your tiny bit of Deep Brain Chain on an exchange like Bit Brain was), should you now look at buying some?
Let's take a look:
This is what the short trading history of MCT trading looks like on Hotbit. It is also listed on BiteBTC, but I don't see any indication of any MCT trades having been made there yet.
Being such a short history, it's performance has thus far been fairly typical of a brand new coin in the current market climate. There's precious little information that one can glean from those candles. All I can see from that chart is that it may have found support at the current price.
We need to look at the fundamentals to make this call
We need to determine if MCT is undervalued or overvalued. That will tell us if we should buy it or sell it.
First we need to know if our investment is going to be diluted or not.
The way to do that is to look at current supply vs maximum supply.
A total of 567 442 000 tokens were airdropped to the wallets. Maximum supply is 580 000 000. Splyse (the developer) kept 2% of the tokens to themselves. That's an incredibly small amount for a development team to keep. It's practically unheard of in crypto, I can't think of a single similar example offhand. Well done Splyse!
What that means is that only another 12 558 000 tokens could enter the market. That's an insignificant amount. Conclusion: Your MCT tokens will not be diluted. That in itself is already a strong Buy or Hold indicator.
Secondly we need to look at token utility. Will MCT be needed?
There is a problem with NEO: smart contracts can receive funds but they can't send them automatically, at least not without the help of a third party add-on. Ethereum can do this, so many developers are used to having such functionality. The purpose of MCT is to provide the functionality that allows smart contracts to send funds when triggered by an automatic action (e.g. receiving NEO at a specific address may trigger a token being sent back to the sender of the NEO, useful when running an ICO). There is quite a bit more to MCT, but this is a blog not a technical paper, so I won't go into irrelevant details. I should however mention that MCT can save considerable sums of money when used for contract storage compared to what that would cost using the regular NEO MainNet.
Thirdly we should look at current price vs future price.
In USD terms, right now each MCT token is worth $0.0164. We also know that there can be a maximum of 580 000 000 tokens in circulation. A good way to judge the relative value of MCT is to see what other tokens with a similar token supply are worth. It's hard to choose a good benchmark. To do that, we would need to know approximately how high up the market cap tree MCT is going to climb. Just like GAS does not command the market cap that NEO does, neither will MCT. It also won't be used as much as GAS is, so we can start to estimate our benchmark based on these educated guesses.
I can see the basic stats of 100 coins at a time using coinmarketcap.com. With GAS sitting at 78 and estimating that MCT will have a lower market cap, I want to guess a ballpark market cap position for MCT. I would say that between position 100 - 200 is a realistic estimate. That covers a market cap span of approximately 25 - 75% the value of GAS's market cap. This is possibly still a bit high an area to be aiming for, but I'm adding in the fact that NEO and GAS are currently relatively undervalued and should be located higher up the market cap ladder in future.
Next I scan the coins ranked 100 - 200 by market cap to try to find some with similar coin supply to MCT. (This is the lazy and easy way - you could normalise all the required market caps, pick an exact comparison point and then adjust prices accordingly; but as this is just an estimate anyway, my quick and simple method works just fine.) Quantstamp (QSP) is worth $0.097469 per token and they have 617 314 171 tokens and Nexo (NEXO) is worth $0.132606 per token and they have 560 000 010 tokens. Those will do nicely. Lets look at what we have:
- QSP ~$0.097
- NEXO ~$0.132
- MCT ~$0.016
Since all three have similar token supply, and QSP and NEXO are located in the current market cap position where we expect MCT to be; we can therefore see that MCT is significantly undervalued. Ignoring the effects of a possible hype-spike in price, we can realistically expect MCT to increase in price by about 6x to 8x.
Conclusion
MCT is undervalued. Remembering that all figures are just estimates, we can expect it to increase in (relative) value by 6x to 8x. To account for inaccuracies we should further increase this range to roughly 5x to 10x. Remembering that a hype-spike may also occur (driving the maximum relative value far beyond the 10x mark), I would consider MCT to be a "strong buy", or at worst, a "hold". I would NOT sell MCP now.
I expect MCT to climb in market cap in the medium-term (from a week to a few months).
That's just a glimpse into the kind of thought process I use when deciding on a trade. Obviously there are other factors (e.g "can I afford it right now?" or "Is there an even more promising coin available?") and we all have different trading plans. I hope this has helped you a little.
What are your thoughts on MCT?
Side note: When looking at NEO as an investment don't forget all the "hidden extras" that come with it! By holding NEO I've received, completely free of charge:
- Ontology - which I will be receiving again once the ONT net is running,
- Master Contract Token,
- and of course the constant trickle of Neo GAS.
The amounts I've received are fairly significant! And of course NEO features the most solid fundamentals of ANY crypto coin or token. You can quote me on that and I dare anyone to challenge that statement.
Yours in crypto,
Bit Brain
DISCLAIMER:
I am neither a financial advisor nor a professional trader/investor. This is not financial advice, investment advice or trading advice. Unless otherwise stated, all my posts are my opinion and nothing more. Crypto is highly volatile and you can easily lose everything in crypto. You invest at your own risk! Information I post may be erroneous or construed as being misleading. I will not be held responsible for anything which is incorrect, missing, out-of-date or fabricated. Any information you use is done so at your own risk. Always Do Your Own Research (DYOR) and realise that you and you alone are responsible for your crypto portfolio and whatever happens to it.