TON Coin has consistently logged gains over the past month while the rest of the market sold off better than 10% and languished. What gives?
While I foresee a reasonable basis for eye-watering returns in a bull market, what interests me in the coin at present is the source of its uncorrelated returns. If we can understand that, then we might have a way to make money while the rest of the market crabwalks sideways. Let's start with the obvious.
1 What is TON?
Toncoin (TON) was originally the cryptocurrency for Telegram—and hence was called the Telegram Open Network.
For regulatory reasons, Telegram divested itself of the project, but the coin lives on. It’s still used as Telegram’s unofficial payment currency. It’s also an L1, like ETH, but with a massive in-built userbase.
And since Telegram continues to grow in use, Toncoin continues to have a growing use case. That explains why it’s surged dramatically over the past 30 days while the rest of the crypto market has declined.
2. How Much Growth?
Well, TON doesn’t have a hard cap on its coin limit as BTC does, but it does have a total circulating supply of 5b coins.
If we assume that that amount won’t grow materially, then some Statista data is important. Back in November of 2022 Telegram reached 700 million active monthly users. It likely has more now.
Also, the Russia-Ukraine war is likely fueling demand for TON coins to allow Russians (who especially use the app) to send money to each other this way. I don’t know if they are circumventing international sanctions, but it might make sense if they were.
The new bot features are also likely driving significant adoption because they're easy to use (even if they don't perform that well). Just have a look at the wallet offerings that include bots:
3. Concluding Thoughts
For this coin's price to grow 10x, it would need to reach $90b in market cap. Binance (BNB) reached $109b in the last bull run. ETH reached $540b.
In short, 10x is in the cards. What you’re betting on is this:
- Continued growth of Telegram
- Continued adoption of the existing user base on Telegram.
- Some outside pressure (such as the war in Ukraine, or maybe just bot demand) to foster higher adoption.
There is no other crypto with such a direct user base.
That’s probably why TON has gone up while the rest of the market has declined over the last month. That's also likey a persistent source of uncorrelated demand.
Happy Trading!!
👉Subscribe to our Free Investment Bulletin.
Disclaimers and Disclosures
This post is provided for educational and entertainment purposes only and should not be relied upon for business, investment, taxation, or legal advice. You should consult your own advisors for those matters. References to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by 1.2 Capital Management. (An offering to invest in a 1.2 Capital Management fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation--all of which should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by 1.2 Capital Management, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results.
The views expressed here are those of the individual author and are not the views of 1.2 Capital Management, 1.2 Labs, or their affiliates. Certain information contained herein has been obtained from third-party sources. While taken from sources believed to be reliable, 1.2 Labs and affiliates have not independently verified such information and make no representations about the enduring accuracy of the information or its appropriateness for a given situation.
Finally, as the author of this report, you should recognize that I do actively invest. Many of my trades are quick and I do write about many investment items, whether stocks, digital assets, collectibles, and the like which I do not own. For the purposes of disclosing any conflicts of interest, assume that if it is covered, I own the investment item. Or if my coverage is negative that I am short the investment item.
Note: the author has adapted the present article from a reply to a Quora question.
