Let's look at SPS price with some context
There's a lot of speculation lately about what's the target price for SPS and no consensus at all about it. Nobody has a crystal ball (if you do call me!) so is natural to give it different prices based on a hunch, but there's a big lack of common criteria to determine top an bottom limits for the price and a lot of people have no guidelines. I would also note that i'm not a financial advisor so you should do your own research before investing.
This article focuses on stablishing some criteria to at least put common sense in that speculation. If numbers are boring for you skip to the last pharagraph, else read on and leave a comment :)
Market capitalization and the maximum price:
Market cap is by far the most logical and straight foward indicator, price alone is NOTHING, market cap is EVERYTHING because things have value relative to something and this is one of the few ways to compare Splinterlands value to other projects.
Currently there's 240 mil in SPS supply and 46% of that is stacked, at current price of $0.59 that's 141 mil market cap with the current circulating supply, sites are likely to show a different number based on the circulating amount considered.
For reference Axies (AXS) has a 4400 mil market cap, according to that the price could rise to $18.4 before reaching Axies infinity size, this is considering how high it could go if everyone buys NOW wich is far from real, hitting even half of that is very unlikely but at least gives a price cap for the short term.
In the long run the total supply of SPS is 3000 mil, the cap price then drops to $4.46 in 1 year and to $1.472 in 5 years given the release schedule, remember this is if we reach Axies market cap in that time, but in 5 years things will change so it's not unreasonable anymore in fact i believe it's quite possible.
So far we have the maximum possible numbers as:
- $18.4 in a month - Ultra unlikely
- $4.46 in 1 year - Maybe if we get into Binance... but unlikely.
- $1.472 in 5 years - Reasonable.
If the price starts to get close to the first year numbers i will slowly diminish my position.
Minimum prices and intrinsic value:
The lowest price the token had was around $0.22 in the last couple of months, this is in fact quite good since it had no value at all except for the trust of the community, after the recent anouncments it drastically changed, now it has utility allowing to buy future packs at a discount among other things and went to $0.6 a couple of times.
In the short term SPS will spike, there's good reason to believe it will go over $1 since it had reached $1.15 in the past with nothing but hype, what's more important, there wheren't any big dumps in the last 6 days, the graph looks solid this suggest people are in for the long run.
Why is it very likely to pass $1? Mostly because of FOMO (fear of missing out) in the next month. In the short term market is ruled by greed and fear but negative emotions are stronger and more common, vouchers, exclusive cards and early packs at a discount are too much to lose and some irrationality will kick in before 10/18/2021.
What i think?
Again this is speculation and nobody knows the future, i belive the price will be between $1 and $3 before october 18, after that it will become really volatile for a couple of months and slowly pullback, i don't see a massive dump since there are good uses and future befenits from holding SPS but can't see a $3 SPS by the end of the year.
Please leave a comment with your point of view, thx for reading!
What I've learned over years of being in crypto, is that supply and demand today doesn't give a shit about fully diluted market cap in the future. The only thing that matters is demand and what's available for sale on exchanges. Some people have a hard time with this.
Lots of liquid SPS from about now until the end of presale will go up in smoke buying packs, most of long term players who have staked so much already probably won't unstake too much because we know SPS is the only way to Diamond Hands here and we can always agree that the price is expected to go up at least little by little so it'll be hard to pry alot of it away from most big holders. All signs point toward scarcity.
When the airdrop stops next July another big change in direction will happen for all our tokens.
Land again, which nobody seems to think about, will have a HUGE impact on SPS. We might need to have it staked and spent (even vouchers maybe needed) to level up buildings on land. We'll need sps to stake on other players if we don't play ourselves. What if we actually do get listed on Bnace? Again this will have a big price impact.
Splinterlands is red hot in a world of wanna bees and burn out failures so we should all expect it to go up though xD
Well said and thoght!
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