There was a Reddit post asking, with all the the noise and FUD, why are people still invested in Cronos? I started typing a reply, which started looking more like a blog post. So, I'll just post it here on my Hive blog.
If you're unfamiliar with Cronos (CRO), it is the utility token for Crypto.com. The company started with the MCO utility token when they were named Monaco. But after they acquired the crypto.com domain, they launched CRO. One problem they had was that MCO was launched with an ICO. Early investors got perks. MCO was looking a lot like a security. As regulation got stricter, it became evident that they had to kill MCO to remain compliant and avoid SEC action. MCO holders were migrated over to CRO. Then CRO was disconnected from Crypto.com with its own nonprofit in charge of development. Today, Cronos is technically separate from Crypto.com (CDC). In short, there has been a bit of turmoil over the years.
In addition, Cronos has been broken up Cronos into Cronos on ETH, Cronos POS, Cronos EVM, and zkEVM Cronos. They have made many improvements to the blockchains over the years. And they have made some controversial decisions, such as reissuing 70 Billion tokens that they had previously burned. The tokens will be used for OTC sales to treasury companies and ETFs. They aren't being sold on the market. The most controversial thing about CRO is that its price has languished since the last bull market in 2020-2021. Many people got in during that time and have taken a loss or have been holding with the hope that the price will go up again.
CDC still uses Cronos as their utility token. Therefore, Cronos is not just a speculative token, there is a business that supports it to some degree. Crypto.com offers discounts on trading for staking CRO. And they also pay out CRO as a cash back reward for spending on their debit and credit cards when staking CRO. Getting the most utility out of CRO depends largely on staking. What this means is that there will always be some level of buy pressure on Cronos.
With so many changes and controversial decisions over the years, it is understandable that many long time CRO holders are frustrated and waiting for a pump to cash out and leave. Many just want to break even. They are a loud bunch who express their misguided anger frequently and loudly. My experience has been different. Let me explain why this is.
My outlook is for 10+ years. I'm not in Cronos to trade. It's a form of long-term savings. My CRO goes into staking to earn rewards. I also stake card rewards. I intend to stake to level up cards as I reach the necessary levels to further increase cash back rewards. With a such a long term outlook, two things are possible: dollar cost averaging and compounding. I buy when it's low and buy when it's high. The intent is to keep accumulating no matter what. It's a personal reserve. The more I stake, the larger my staking rewards get. These compound in the long term. In short, My long term focus filters out much of the noise about Cronos.
Why do I have confidence for long term holding?
The charts show that over the long term, the lows are increasing. Yes, there are spikes and crashes. But the lows are still getting higher.
Card and staking rewards have zero cost basis, which lowers my average price.
There are businesses actively putting money into the Cronos blockchain(s).
CDC buys CRO for card and other rewards.
ETFs are on the way. The ETFs plan on staking their reserves. And up to $6B are on the sideline waiting for deployment.
Recently, CRO is being used for rewards on Truth social.
CDC's focus on compliance and their ability to remain profitable assures me Cronos will be around for a long time.
Occasional token 50 million token burns.
Almost a third of CRO is staked to secure the network (about 11.238B staked out of 36B in circulation).
When will I have enough CRO? I don't know. With billions in circulation, I don't think I'll ever have "enough". I think it's silly to trade on something with so many tokens. You can, but the amount of tokens in circulation makes it difficult to move the price. And there are always people willing to sell with any little bump.
CRO is better suited for accumulation than waiting for drastic appreciation. Other coins with smaller amounts in circulation are better for trading. My long term focus also makes the price volatility somewhat amusing. Suddenly gaining or losing $1000 or more in value is surreal. Up or down, it's a brag. "Oh, look. Ha ha ha. I lost (gained) $1000". This would be devastating to my household budget. But as a separate stack, it's just another day.
HIVE has many similarities to Cronos. And there is one major differences. That difference is that there is no business backing HIVE. The price of HIVE is largely based on trading. People earn HIVE and either stake or sell it. If you compare HIVE to LEO, which has InLeo and LeoStrategy funneling profits back into LEO, you will see what a difference it makes to have an enterprise actively using your token. Price goes up. The same comparison can be made between HIVE and Cronos, with Cronos having a multi-billion dollar companies backing it to make the price go up.
But the similarities are that the success of HIVE and Cronos is largely based on how many people stake. With larger stakes, the staking rewards also increase.
Both Cronos and HIVE have relatively small communities.
Both Cronos and HIVE have limited exposure to outside exchanges.
Both Cronos and HIVE have not had a great deal of volatility over the years.
I have remained on Hive largely for the free blogging platform. But in reality, you don't need thousands of HIVE to blog. I have far more resource credits than I could ever use on this and other accounts.
Like on Cronos, many Hivers are frustrated with the languishing price of HIVE, even though we are doing better than STEEM. But when you think about it, the main reason why people are frustrated with the price of HIVE is that they have no intention of building up their stake. They want the price to rise so that they can cash out.
Similar to Cronos, Hive isn't built for trading. Hive is better suited for long term accumulation. You can earn HIVE from inflation, creating content, and from curation. Over the long term, this can build up to a significant treasury. At that point, it might be possible to live off the rewards rather than have to power down your stake.
To tie this all together, I came to realize that a trading mentality with Cronos and HIVE just doesn't work. Cronos has billions of tokens in circulation and HIVE technically has infinite tokens. The only way this works is for a majority of holders to stake, and stake some more, to take tokens out of circulation. And it helps to have a long term perspective on building up your HIVE (or CRO) bags. The day to day FUD will cause you to sell before you've built anything meaningful.
I know how tempting it is to cash out and try to find something else that you can trade for faster profits. But that sort of thinking is a bit pathological. If you put your HIVE into HBD Savings, the 15% interest is amazing in most circumstances. But there's a mental disease that causes so many to want more than 15%.
Take into account how long it takes most of us to earn $100 in HIVE, which is roughly 700 HIVE at today's price. That's hours and hours of blogging and curating. Once you sell it, you have to earn it back to have another $100 to sell.
Now, let's say you have $8000 in HBD. You'd be earning $100 in interest every month without any curation or blogging. Your curation and blogging can continue to grow your savings so that the HBD interest next month could be $101, $102, and so on.
Bitcoin works because of the scarcity of 21 million coins. But Cronos with billions of tokens and HIVE with theoretically infinite tokens (currently at around 500 million), scarcity is not as effective unless a majority of the tokens are staked and out of circulation. With large circulations, the focus shifts from trading to accumulation.
It's this accumulation-based thinking that keeps me in Cronos and HIVE. The more I accumulate, the more I earn.
