Kin tokens, launched by the ever-growing Canadian-based messenger service Kik, have seen a sharp rise in price in the last few days. Unlike some other projects, the price increase seems to be tied to both BTC and the US dollars.
Starting from December 28th, token prices have gone from $0.0001 to a current all-time high of $0.0014 which represents roughly a 14-fold increase in value. What’s behind the sudden drive in price, and is Kin worth an investment? Read on as we take a look at this potential social media cryptocurrency contender.
Kin Tokens: A Brief Review
Previously at Coinbureau, we reviewed the Kin token, and their announced pending shift away from Ethereum. The aim of the token is to be used as a extremely low cost and decentralized currency on a new “ecosystem“ themed around Kik. The plan is to target preteen through young adult age ranges. They hope to introduce potentially millions of users to an easy to access and affordable cryptocurrency. According to Forbes, the company raised close to $100 million following their token sale.
While the idea of a low-cost or friendly token is not new, what makes Kin tokens compelling is the idea that anyone who owns a smart phone with the Kik messenger app, which includes millions of users (especially young ones), will suddenly have a cryptocurrency wallet installed on their phone and ready to go.
This argument is quite similar to the one posed by Blu-ray versus HD-DVD back in the mid 2000s. Back then, many people suspected that Blu-ray would take off simply because it was included in every PlayStation 3, a gaming device which was eventually owned by tens of millions of people.
In the end, this assertion was proven to be true, at least in the sense that Blu-ray won the HD format wars. Just as the PlayStation 3 put a Blu-ray player into the homes of millions, the Kik messenger app may put cryptocurrency in the hands of even more.
What’s driving the price hike?
Source: Kin Telegram Chat
An investigation on recent happenings regarding the Kin ecosystem have largely proven fruitless. Official Twitter feeds make no mention of any significant developments, the Telegram chat seems to be mostly full of lambo memes (or “Lambokin” in this case), and most major news sites are not reporting any significant details other than the fact that the price has gone up so suddenly.
What we may be seeing here is a combination of effects like whale activity (meaning market manipulation) much like we saw with Dogecoin this month. Or it could be the result of a small price hike due to interest after the shift to Stellar. This in tern, could be leading to a positive feedback loop which results in FOMO. That being, Fear Of Missing Out.
FOMO is well known for increasing demand even further. This sort of positive feedback loop is also perhaps largely responsible for the large increase in price that bitcoin saw last December. Basically speaking, people see the price go up, so they buy more hoping that the trend will continue and they can make a profit.
Good long-term investment?
Will Kin tokens be a good long-term investment? Based purely on the sudden jump in price, we cannot say for sure if this trend will continue. We need to consider what is the main goal of the project, and what is it for.
As it is intended for people who are new to cryptocurrency, and also to young people who generally don’t have a lot of money, it is unlikely that from this primary user base we will see huge inflows of cash quickly. Most likely, significant or quick price activity will be the result of whales or speculation. As the Kin ecosystem has not fully launched yet, we also don’t know what it will be capable of, or what the public will think of it.
It is entirely possible that it could simply be viewed of some kind of points program and not a true currency. Or, it’s possible that perhaps one day stores will accept mobile payments of Kin tokens all over the world.
If we consider the popular Chinese messaging app QQ, such an event did occur at least somewhat in the years before mobile payments took off in the country. QQ offered it’s own currency (link in Chinese) called “Q Coins” (not a cryptocurrency), and some online stores did accept them. Point being, a messaging app’s built in currency being accepted for payment outside of its own network is not impossible.
If you find yourself interested in the Kin ecosystem, and not just in the sudden price hike, then you should look into the documentation about the project and see if you believe it has a strong future. If you’re just looking to swing daytrades, then you may have already missed this opportunity. Looking elsewhere for the next hyped up project might be a better idea.
Disclaimer: These are writer opinions and should not be considered investment advice.
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