I have been following the Monaco story since its ICO and have generally been fascinated by the idea. From my point of view, the differentiator between Monaco and all other (current) crypto-card offerors is that you can actually use it well for fiat purposes also. Having interbanking rates to exchange different fiat currencies is a huge value add. In that sense I think Monaco’s actual prime competitor is RevolutApp, which basically has perfected interbanking fiat rates and has a large user base head start (c 450k users), but is just dipping its toes into crypto. Monaco will need to parlay its first-mover advantage into crypto into quick user growth to effectively compete in the mass market. I am not writing this very small post to convince anyone that despite all the missed deadlines and earlier leaks Monaco isn’t a scam. I think it has developed way beyond that point — of course Monaco is legit. Its struggles were simply due to many factors that would impact any start up. All of a sudden a 5 person team had 3000 people asking them for deadlines etc, while still collecting first experience with card issuers and their pace as well as regulations. So could communication have been better? Sure. But in all honesty — running a start up myself: if you are under the magnifying glass for all of your actions this early, it does not help and small missteps are bound to happen. ICO investors are up way beyond BTC price rise, so no one should complain.
So what am I writing about? I am writing about the valuation of Monaco vis-a-vis its peers to explain the paradox of crypto market cap.
Leaving aside the fact that there are no real methods to value any of these token given they hardly carry intrinsic value, Monaco is a great example to point to one thing the crypto world seems to always forget:
Market Capitalization is generally defined as the number of outstanding shares (which means ALL shares, not just those not held by a large shareholder, which would be referred to as the “free float”) times the price of a share.
Ie. Market Cap = outstanding shares in issue x price of one share
So in Crypto (and websites like like coinmarketcap.com are not doing a good job at this; they have actually taken the option to switch to total value off the website) the translation is:
Market Cap = Total Supply of Coins (NOT “Circulating Supply”, which excludes the team members token) x price of one coin
People who use Coinmarketcap to compare market caps between two firms’ token ignore this difference. On Coinmarketcap only the value of the circulating supply is shown, which is misleading as it assumes that the rest of the token, held by team members can never be sold (but the opposite is true).
So what does this mean for our example?
People keep saying “Monaco should be worth at least as much as TenX so it can still double in value at least”. That is simply wrong. Not the fact that I agree it should be worth as much as TenX, but the fact that it can still double or more.
Circulating Supply: 104,661,310 PAY
Total Supply: 205,218,256 PAY
Price / PAY: 0.000282 BTC
Real market cap: 57,871.5 BTC (=c 370m USD)
Circulating Supply: 9,814,875 MCO
Total Supply: 31,587,682 MCO
Price / MCO: 0.00137
Real market cap: 43,275.1 BTC (= c 277m USD)
So yes, Monaco absolutely should probably trade higher than where it trades right now. But when it trades at 0.00183 BTC / MCO it is valued at parity with TenX. Not when it reaches old ATHs. Note also that on the first VISA news earlier today it actually surpassed TenX in market cap. It was no longer playing catch-up.
In my opinion this issue with market cap (for token that have zero voting rights in most cases and after MCO scrapped its dividend model that one also has zero participation in profits, ie represents hot air) in crypto is one of the reasons that the current ICO generation will first tank to very low levels akin to what happened to .com firms in 2000/2001 once regulation properly gets released, before the good projects can rise from the ashes, but potentially offering a kind of ownership on the blockchain (Crypto Depositary Receipts, akin to ADRs are actually coming).
I believe both TenX and Monaco are probably part of that group of good projects. But remember — when the .com bubble finally burst, Amazon shares traded at just 5.5 USD (they now trade at 1000+ USD)…
Finally, I should mention this is NOT an article that aims to say “Monaco is undervalued”. It is merely showing the problems with crypto market cap currently. This is not investment advice. It is personal opinion.