ForexMinute.com – When Darkcoin open-sourced its code at the end of last month, market pundits expected investors to jump inside this altcoin’s trading boat. But somehow, October didn’t bring much excitement to the Darkcoin market, as its market cap fell by over $2 million in the last 27 days.
One cannot doubt that Darkcoin has emerged as one of the most promising cryptocurrencies for future markets. Its rise from nothing-to-something is surely a tale to tell, whether it is about the impeccable anonymity features it brings, or a responsible and active development team it is backed with – everything works in the favor of Darkcoin, except the market reports. Have a look at the following chart (source: coingecko.com).
The DRK/USD closed at 2.83 on 9/27. It was the same week when Darkcoin had open sourced its anonymity-offering protocol Darksend. The positive sentiment somewhat upheld the Darkcoin price in a sideways range. The coin’s market cap recorded on the same date was around $14 million. But as the days approached, Darkcoin began to lose its shine under multiple influences (we will discuss it later) amidst strong bearish sentiment which brought the DRK/USD to 2.09 on 10/7. There the recorded market cap was $9.9 million, around 28% less than the previous noted peak.
From 10/8 to 10/20, the DRK/USD remained in a trading range between 2.09 and 2.34 amidst a fluctuating demand-supply ratio. During the 10/23 trading session, the pair pushed lower and initiated a downtrend from the resistance of 2.08, which brings us to the present in which the DRK/USD is being valued at 1.91. In the meantime, the Darkcoin market cap has fallen from $10.7 million to $9.1 million.
The Bitcoin Effect
It was not just Darkcoin which went through a tough month in the cryptocurrency market. Every other top coin, including the leading digital currencies Bitcoin and Litecoin also went through a similar phase. While Bitcoin this time fell below the $300 mark thanks to huge selling sentiment, Litecoin too remained coupled to Bitcoin’s volatility. Furthermore, the market reported a notable drop in cryptocurrency trading volume which might have impacted the Darkcoin as well.
Low User and Merchant Adoption
Another reason why Darkcoin was subjected to a massive fall is low merchant adoption. There were certain things expected when the Darkcoin code was open sourced – one of them being the arrival of underground markets to accept this anonymous cryptocurrency. But since the announcement, the coin only saw two amateur marketplaces arriving at its doors. Reportedly, they haven’t even sold a single item for DRK.
On the other hand, low volume suggests that Darkcoin added very few investors into its community this month. It is again due to the fact that traders were more interested in buying Bitcoin at a bottom rather than spend on some feature rich altcoin. The greed played a major factor here. The high trading volume between DRK and BTC also suggests that few investors shifted to the Bitcoin community in order to earn quick and short profits.
The only trouble inside the Darkcoin community is people who are more inclined towards treating the coin as investments, rather than a terrifically unique transaction medium. When one treats a cryptocurrency like a commodity, a fall is likely to happen. The focus here should be to attract merchants and users to boost Darkcoin adoption, at least within underground markets. The more demand, the merrier it is for the Darkcoin and its traders.
The developers are gradually working towards bettering Darksend in terms of transaction speed and flexible obfuscation. The added features are likely to add more adoption rate to Darkcoin, which can ultimately result into more inbound investment. We earlier quoted Darkcoin as an ideal altcoin for long term holders, citing the same reason. Maybe it is the right time to collect your Darkcoin investments, lock then in a safe, and forget about them for three years.
Disclaimer: The writer holds some Darkcoins
To contact the reporter of the story: Yashu Gola at email@example.com