Counterparty recently announced that they will be integrating Ethereum’s smart contract capabilities on their platform. This is big news for Bitcoin because it will add more utility to its blockchain.
Counterparty is a financial platform for creating and trading assets on top of Bitcoin’s blockchain. This smart contract integration will add new possibilities for creating DAPPS (Decentralized Applications).
XCP as an Undervalued Asset
Counterparty has its own native currency called XCP. This currency is required to create asset tokens and will likely be used as a fuel source for smart contracts. In my opinion, XCP is one of the most undervalued assets in the crypto markets and has huge upside potential.
Investors generally look to maximize returns by hunting undervalued assets and accumulate long before the majority of traders get priced into the markets.
Key Benefits of Counterparty
- It leverages Bitcoin, the most secure and popular blockchain in the world.
- XCP has a fixed supply of 2.6M and is deflationary.
- It created one of the first decentralized exchanges.
- It has several innovative projects in its ecosystem such as Storj, Foldingcoin, Tokenly, Spells of Genesis and Coindaddy.
XCP Markets
The XCP markets are currently illiquid which means any added volume can dramatically push the price up. A couple of months ago, news of Ethereum integration leaked out which attracted new traders into the space. Trading volume increased to over $1M and the added volume spiked the price +350%.
These price spikes are highly volatile due to a thin order book. New money pushes the price up while old money either takes profit or recovers losses. In the event that enough demand for XCP is created, the price will likely stabilize at a much higher valuation.
The all time high for XCP was 0.045, worth $19.71 USD at the time. The rally started on the announcement of Overstock hiring Counterparty developers. Four months later Overstock and Counterparty parted ways and the price of XCP crashed.
XCP consolidated after a long downtrend and broke above 0.002 resistance a few months ago. The markets are showing signs of a potential trend reversal.
Fundamentals
XCP has a market capitalization of only $3.6M, ranking it as #26 for cryptocurrencies. This indicates that there’s lots of room for market growth. Its fixed and deflationary supply of 2.6M coins makes it an appealing investment.
Ethereum being the most recent bull market had a +1500% price increase at its peak. Although Ethereum is a trendsetter, it has 3000% more coins and is valued 700% higher than XCP. Ether’s current annual inflation rate is 17.41%.
With Ethereum integration on the horizon I suspect that Counterparty will attract new users into the space and increase market demand for XCP.
It appears that Counterparty is starting to become popular in Japan, a country that’s showing promising growth in the Bitcoin space.
Forecast
XCP will likely spike in price again on the release of smart contract integration. We need to see a sustained increase in trading volume for a real bull trend to happen. For those who are accumulating, a drop in price may be an opportunity to cost average with larger positions.
The price of XCP needs to rise to at least 0.0087 in order to make it back to the top ten for market capitalization. I see this as a longer term play that may take several months.
Disclosure: I own some XCP.
Rocky
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