Is Qtum (QTUM) a Good Investment? In-depth Analysis and Near to Longer-Term Expectations
Is Qtum (QTUM) a Good Investment? In-depth Analysis and Near to Longer-Term Expectations

By CryptoBoomer | Investments | 14 Jan 2020


Investing in cryptocurrencies can be the most lucrative investment a person can make. Bitcoin was the best performing asset of the decade and numerous other cryptos have delivered face-melting returns as well.

And guess what?

The investment opportunities crypto presents are far from over. In fact, they may just be getting started. 

Crypto and blockchain technology is still in its very early days. Just like the AOL and dial-up days of the internet, there’s still a lot of developments and innovations to be done. Crypto and blockchain tech has yet to be widely adopted and the entire industry is still evolving. 

Even the two largest cryptocurrencies today - Bitcoin (BTC) and Ethereum (ETH) - suffer from critical problems that prevent them from going mainstream. They are slow, inefficient, inconvenient, and simply don’t live up to their full potential just yet. 

However, just like Internet innovations such as modems, wifi broadband, web browsers, and search engines helped to improve the internet, there will be multiple innovations that help improve blockchains.

And with the advent of cryptocurrencies, people can capitalize on these types of innovations by investing in their corresponding crypto tokens which utilize lucrative tokenomics to push up their price.

One such example of an innovative crypto project making blockchains better is Qtum (QTUM) - a decentralized public blockchain platform and value transfer protocol. 

The Qtum blockchain is a hybrid of both Bitcoin and Ethereum with its core code and UTXO model adopted from Bitcoin and it’s smart contract capabilities adopted from Ethereum and the Ethereum Virtual Machine (EVM). 

Not only has Qtum adopted these key qualities from both Bitcoin and Ethereum, but it has implemented its own unique features and innovations as well. 

That being said, is Qtum a good crypto to invest in?

Let’s find out.

For the remainder of this article, we’ll take a deep dive into Qtum (QTUM). We’ll look at its price action, it’s level of adoption, development, unique features, and the risks and challenges it faces. 

By the time you’re done the reading, you’ll have a fundamental understanding of whether or not Qtum (QTUM) is a good investment. 

Qtum (QTUM) - A Brief Summary & History

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Qtum — pronounced “Quantum”— is a Proof-of-Stake (PoS) smart contract blockchain platform and value transfer protocol. It combines the strengths of Bitcoin’s stable blockchain and Ethereum’s virtual machine to offer a blockchain platform for businesses to develop smart contracts and dapps at scale.

The Qtum (QTUM) cryptocurrency was created by Patrick Dai and Jordan Earls in November 2016, before it was officially launched in September 2017. The project is based out of Singapore and has a global community of developers and contributors working on the project. 

The aim of Qtum is to solve some of the main problems plaguing both Bitcoin and Ethereum by combining the best features of each. 

In doing this, Qtum hopes to provide businesses with a decentralized public blockchain platform with smart contract functionality, dapp building capabilities, and the ability to process millions of transactions quickly and efficiently. 

Qtum (QTUM) ICO & Distribution

Now that we have an understanding of what Qtum is and who’s behind it, let’s delve into its launch and token distribution.

One of the most important factors to consider when investing in a cryptocurrency is to understand how it was launched and distributed. Knowing these details will give you an upper hand when investing because you’ll know if the coin’s supply is centralized or fairly distributed. 

If the coin's supply is centralized, there’s a greater risk of price manipulation and the big holders could potentially crash the price by dumping their coins. Therefore, you want to make sure the supply is fairly or at least responsibly distributed.

Let’s see how Qtum (QTUM) was launched and distributed:

First off, Qtum has a:

  • Maximum supply of 107,822,406 QTUM
  • Total supply of 102,053,244 QTUM
  • Circulating supply of 96,303,224 QTUM

The Qtum project was launched through an initial coin offering (ICO) in March 2017. The ICO was to be open for 30 days but was sold out within less than 5 days. The Qtum team raised a total of $15.6 million in exchange for 51 million QTUM tokens, effectively making it the fourth largest ICO of all time.

As for QTUM’s token allocation:

  • 51% was sold to retail investors and the Qtum community
  • 20% was reserved for Qtum’s founders, early backers, and the development team
  • 9% is reserved for academic research, education, and market expansion
  • 20% is reserved for business development

By the year 2021 (4 years after the QTUM ICO), QTUM’s token distribution should be:

  • 80% held by the Qtum community
  • 20% held by Qtum’s founders, early backers, and the development team

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All in all, I would say that Qtum’s token distribution is pretty fair, especially compared to many other crypto tokens such as Ontology (ONT) where a large majority of the supply is held by its founders and VCs. 

Qtum (QTUM) Development & Unique Features

Qtum has already come a long way since its launch and now offers multiple virtual machines including Ethereum’s EVM and the revolutionary x86 VM which supports a variety of programming languages. 

With these virtual machines combined with the security of UTXO, Qtum provides developers with a standardized, stable and safe development environment for smart contracts and decentralized applications (dapps).

As for Qtum’s other unique features, they include:

Decentralized Governance Protocol (DGP)

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Qtum’s unique DGP allows specific blockchain settings to be easily upgraded or modified by making use of smart contracts. For instance, unlike Bitcoin or Ethereum, Qtum can make system upgrades such as an increase in block size without the need for a hard fork.

Abstract Account Layer (AAL)

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Qtum’s AAL decouples applications from the underlying protocol which maintains and increases the performance of the Qtum blockchain and leaves room for more smart contract capabilities in the future. 

Global Proof-of-Stake (PoS) Network

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Qtum has the largest PoS peer-to-peer network in blockchain and is the second-largest blockchain network with 2820 full nodes and is only exceeded by the Bitcoin and Ethereum networks.

The Qtum network has global nodes distributed across six continents with South Korea hosting the most with 1421 nodes, followed by the United States with 493, Singapore with 244, China with 139, Japan with 71, Germany with 65, and with the rest spread across 56 other countries.

Wallet Ecosystem

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Qtum has a full spectrum of crypto wallets that meet the needs of different users. Qtum has wallet support for iOS, Android, Windows, Mac, Linux, hardware wallets, web, and other clients.

Developer Resources

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Qtum serves hundreds of developers from around the world with a complete development toolkit and resources for blockchain and app development.

All in all, the Qtum blockchain is already business ready and provides customized solutions for enterprise clients.

Qtum (QTUM) Price Action & Market Structure

So far, I think it's safe to say that Qtum is a promising cryptocurrency and blockchain project from a fundamental perspective. It has a fair token distribution, a business-ready blockchain platform, and numerous innovative and unique features.

However, some investors would argue that an asset's fundamentals aren’t nearly as important as the technicals. Therefore, before we can decide if Qtum is a good investment, we must analyze QTUM’s price action. 

Now, let’s keep things simple. 

When analyzing the price action of a cryptocurrency, or any asset for that matter, it’s often best to keep things really simple and look at its macro price action and market structure.

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The price chart above shows Qtum’s price history starting from May 24, 2017, to January 13, 2020, on a log scale. 

As you can see, QTUM began trading around $4.00 - $5.00 and then pumped up to $16.35 before coming back down to that $5.00 range. In the months after, QTUM worked its way up until it reached its all-time high (ATH) of $100 on January 6, 2018. 

After that, the bear market hit Qtum, along with other altcoins and sent their price cascading downwards. 

Qtum eventually found a range of support around $4.00 once again. This range officially became Qtum’s first level of market structure:

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As you can see from the price chart above, this $4.00 level represented Qtum’s level of market structure and was a critical level to hold above. However, as you can see, once it broke this level, the price fell hard and established QTUM’s all-time low at $1.56 on December 6, 2018. 

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Now, as seen in the price chart above, this low level of $1.56 represents Qtum’s new level of critical market structure. If Qtum can hold above this level and continuously push towards the $4.00 price range, I would say that Qtum is a good investment. 

Also, if Qtum is able to break through the $4.00 resistance level, this would show signs of major strength and resilience for Qtum and a lot of smart money would start coming in. 

Qtum (QTUM) Risks & Challenges

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While Qtum (QTUM) may appear to be a solid investment that has a lot of potentials to perform well at its current price, there are still various risks and challenges it must overcome. 

For instance, it’s commonly said that over 95% of the successful cryptocurrency projects we have today will eventually fail. As for the other 5%, they will become the next Apple, Google, or Amazons of the cryptocurrency world. 

So, the question is, will Qtum fall into the 5%?

While nobody can say for sure, you can bet that it will need to overcome the following challenges if it does:

Competition
One of the biggest challenges facing Qtum is competition. While Qtum can run Ethereum smart contracts and others, there isn’t a whole lot of incentives for developers to chose Qtum over Ethereum at present time. 

Ethereum has the first-mover advantage and much larger brand awareness. Ethereum already has a massive global community along with helpful toolkits and resources for developers, and its market cap is about 50 times the market cap of Qtum. 

And not only is Etheruem’s competition a problem for Qtum, but there are also numerous other smart contract and dapp building platforms such as EOS, Neo, Tron, Cardano, Stellar, Tezos, Waves, Lisk, and a plethora of others. 

All in all, the competition is fierce and it’s doubtful they all survive in the long-term.

Not Popular in the West
Another challenge facing Qtum is its lack of popularity in the west. Qtum is a Chinese cryptocurrency project based out of Singapore and its community and the majority of investors are predominantly from Asian countries such as China, South Korea, Japan, and Singapore.

Most of Qtum’s trading volume comes from Asian exchanges and Qtum (QRC-20) tokens are not popularized on most major exchanges. 

According to some members in the Qtum community, the Qtum Foundation isn’t doing enough to get noticed in the west and Qtum dapps aren’t gaining traction. 

All in all, Qtum needs to gain more widespread popularity if it ever hopes to beat out competing smart contract platforms and attract more investors. 

Conclusion

There’s no question that blockchain technology and cryptocurrencies are revolutionary pieces of technology that will forever change our monetary systems and the way businesses operate. 

However, in order for this vision to come to fruition, there are many blockchain improvements to be made, and Qtum is one of the crypto projects making these improvements. 

Fundamentally, Qtum appears to be a good crypto investment as the project is continuously evolving and implementing new innovations that improve blockchains. As well, the project’s QTUM tokens are fairly distributed and the price of Qtum seems to have bottomed. 

All in all, I would be keeping my eye on Qtum as I believe it will be a good investment if the price holds above its lows and pushes higher. 

What do you think about Qtum (QTUM)? Do you think its a good investment? Why or why not? Let me know what you think in the comment section below.


CryptoBoomer
CryptoBoomer

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