In our last ‘fundamental’ article “Why a specific and unique CUPRUM COIN’s underlying asset makes this coin different from any other in the market”, we wrote about CUC’s uncompromised underlying asset demand, which will stay there for a long time. Here we’d like to describe how CUC’s value is derived from its asset demand and why CUC is a safe investment plan.
Cryptocurrency fundamental value?
Pretty much all cryptocurrencies today are highly volatile and highly correlated. Most of the money currently invested in the cryptocurrency market is utterly speculative due to the cryptocurrency platforms’ constant struggle to scale their technologies to the point where they can support millions of users (like payment processors can handle). As many investors are focused only on speculative trading driven by price and volatility, they fail to understand the real value of cryptocurrencies. Cryptocurrency value fluctuation results from demand fluctuation, which also depends on (not always elastic) supply. All this together remains unclear what is the fundamental value of the cryptocurrency.
Collateralized coins as the rescue from price volatility
As the market becomes more accessible to investors, we see collateralized coins becoming more and more attractive to users. The main reason is safeguarded value propositions they have offered compared to the other crypto coins with no stable price predictions. Namely, these coins are collateralizing stores of value that fully back the price of that cryptocurrency.
When it comes to classifying the asset-backed crypto coins, we see the ones which are more centralized (fiat equivalent and fiat/asset-backed) and fully decentralized (crypto collateralized and algorithmic) coins. If we explore the major concerns related to more centralized coins, we’ll see the claims made by asset-backed tokens and the risks of whether they are backed in the way they claim. Or, how does an issuer prove that they have all the reserves backing the currency?
CUC, the coin where asset’s demand maintains the value long-term
Regarding the previously mentioned risk, the CUC is really backed with an underlying asset in the way we claim. We are open to all generally accepted methods (like third-party auditing) for proving all claimed assets are in our custody. Our interest is to conduct this process as transparently as possible because we don’t want to be perceived as an unstable and high-risk investment option.
Like all other cryptocurrencies, CUC derives its value from the demand and supply ratio. We wrote in the last article that one appealing characteristic of its underlying asset brings a fundamental difference: CUC inherits and maintains its value from demand for an underlying asset which is estimated to stay intact for a long time. That’s how a simple equation can explain the likeliness of further increase in attractiveness of the CUC: increased underlying asset demand = higher CUC demand which leads to higher CUC real value.
Having said all that, and as we are just in an initial phase of the market creation (at the time of writing CUC is listed just on 2 exchanges, with price level collateralizing below 3% of the asset’s value, it is wise to consider buying and holding CUCs for a longer period time. Finally, we believe that CUCs demand will always protect the value of the holdings.
CUPRUM COIN, Thy Cryptocurrency of the Future