Dao Market Report 05/16/16

The DAO just raised $119.59M USD, making it the #1 crowdfunder in history. This campaign still has 11 days left to raise more funds, which will likely give it a solid lead over any other projects. 

What distinguishes the DAO from other ICOs is that the funds are locked into an Ethereum smart contract and controlled by the investors. The sale started at a rate of 100 DAO per 1 ETH and is now going at a rate of 1.1ETH. The crowdfund lasts for 11 more days and tokens will become progressively more expensive. 

Fundamentals

  • Current supply: 1073.93M DAO tokens
  • DAO fund equity: 10.75M ETH 
  • Fund equity value: $119.59M USD
  • Current value per DAO: 0.00027236 BTC
  • Market capitalization:  $132,500,495 USD
  • Rank: #5

Markets

The DAO crowdfunding started on 04/30/16, which immediately increased buying pressure on the ether markets. Ether was downtrending and bounced off of 0.0152 support, which is the 38.2% Fibonacci retracement level. 

ethereum chart

The DAO is currently the largest holder of ether, controlling 13.41% of the entire supply. I suspect that the price of ether may continue to slowly rise until the sale is over. 

DAO tokens will be available to trade immediately after the crowdsale and will likely get listed on all the major altcoin exchanges. BitMex currently offers DAO futures contracts. Like most coins the value may spike during price discovery and crash as some traders race to take profit. 

Given the linear cost of DAO tokens and the continued buying pressure on the ether markets, it will likely rank as #3 for market capitalization during the last days of pre-release. In order to sustain this valuation there will need to be more buyers than sellers once it hits the exchanges. 

I see two possible scenarios playing themselves out:

  1. Most investors become priced in pre-release and sellers drop the price lower than the initial cost.
  2. Whales who own a significant share of the funds use their deep pockets to pump the price, encouraging new participants to enter into the market. 

The top DAO holder owns 38,888,800 tokens, which is 3.6% of the supply and is currently valued at around $4.8M USD. The top 9 addresses own close to 19% of the entire supply. 

DAOholders

Once some of the ether funds are released, they will likely need to be converted back into fiat to pay for projects, this may increase selling pressure on the markets. 

DAO is the first financial experiment of its kind so there’s bound to be unknown dynamics that will affect the market. We don’t know all the details on how investors will choose to use the pooled funds. Other elements such as paid dividends or withdrawing ones principle investment can also change variables. 

I expect there to be high volume and volatility in these markets, which will make for great trading conditions. If DAO succeeds, it will add more value to the Ethereum network and may lead to other similar projects being launched. 

 

 

 

Rocky

Crypto trader and investor. My preferred style is swing trading and longer term accumulation plays. I help coach traders and share my trades over at skillincubator.com
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