The Tron cryptocurrency is one of the lesser known blockchains in the crypto industry.
Despite its humble beginnings and obscurity from the media and public eye, Tron has managed to increase in value by 10,000% at one point in time.
The 100x multiple in price saw it climb from $0.002 to $0.20 in little over a week.
With a current price of around $0.05 a coin, could it increase 200 times in value and reach $100 a coin?
Part of the reason for its growth is collaborations and strong protocols.
Many meme coins grew on the back of media speculation and gold rushes. Just one tweet from Elon Musk could send the price of Dogecoin or Shinu Inu dramatically upwards.
Tron had no such glamourous backing.
Instead, Tron relied on its mission goal and collaborations with giants such as Samsung and Opera (the famous web browser) to secure its foundation and provide a reason to invest.
After the founder famously paid $4.57million for lunch with the infamous Warren Buffet, it is safe to say this Blockchain has amassed some serious capital over the past 6 years.
It acquired BitTorrent and access to its network of 100 million users back in 2018 and has since become a fully decentralized system with DAO in place.
This simply means no one person manages the direction of Tron, and each coin holder has a vote in the company’s direction and future – hence being a decentralized entity now.
Decentralization is how and why Bitcoin and Ethereum were founded.
Market capital is the biggest deciding factor as to whether a cryptocurrency has the potential to 1Mx its current price.
Now, Ethereum managed to increase its price from a low of $0.81 to a high of $4,300, and Bitcoin managed to increase its price from a low of $0.09 to a high of $51,000.
Based on these price increases, it seems feasible that Tron could increase from $0.15 to $100.
But ultimately, it’s the market capital that needs to be analyzed to see the true potential.
What is Market Capital in Cryptocurrency
Market capital in the cryptocurrency world is the calculation of the number of tokens in circulation multiplied by current unit price.
This calculation provides the most accurate view and valuation of a cryptocurrency as it allows investors to draw comparisons to other cryptocurrencies on the market.
It can be shown more simply using the calculation:
Number of tokens in circulation * Trading Price = Market Value
As to whether Tron can reach a $100 coin valuation will be based on its current market value against other cryptocurrency, and other valuable companies.
If the coin has an extremely high market capital, even if it has a particularly low unit price, it indicates growth of this type of value is very difficult
Although, a low market capital, even with a relatively high price, can show the crypto at least has the potential for large growth and very high returns.
Whether a cryptocurrency price increase or falls is down to demand, so it needs to be able to find buyers and investors to increase at all, let alone by 1 million times its current value.
We can look at this using an example:
A cryptocurrency with 3,000,000 circulating coins may have a trade value of $70 a coin, giving this cryptocurrency a market share of $210,000,000.
Another cryptocurrency with 25 billion circulating coins may have a trade value of $2 a coin, giving this cryptocurrency a market share of $50,000,000,000.
Although the second cryptocurrency has a current price of $2 compared to the first cryptocurrency of $70, it is the $70 cryptocurrency that is worth less.
150 times less in fact.
It will be relatively easier for the first coin to increase 100 times in value to become worth $7,000 and have a market capital of $21billion than it will for the second coin to increase 100 times in value, become $200 a coin, but have a market capital of $5trillion!
Market capital is a better indicator of potential future growth when comparing against other cryptocurrencies, than the value of the coin.
Market Capital of Tron
Day to day the market capital of Tron will fluctuate, although fluctuations will mostly remain relatively mild.
The number of coins in circulation will stay similar over the short term but based on supply and demand of the crypto it’s unit price will fluctuate, and therefore so will its market capital.
Unless there is a dramatic shift in the crypto market then TRX should stay relatively stable.
At the current time the market capital of Shibu Inu is $5billion.
This is quite a considerable size for many cryptocurrencies, especially one as obscure as Tron. It is generally always in the top 15 valuable cryptocurrencies at any point in time since 2021.
Although 5 billion dollars is a substantial market capital, compared to Bitcoin and Ethereum it is relatively small.
Its current huge size is due to its investments, reach and now collaborations and partnerships as well as a long term decentralized autonomous DAO controlled ecosystem, which it has now obtained.
This does though mean many people who bought in to cryptocurrency already own Tron and joined in the search for crypto gold, meaning any huge growth will have to either by way of shift from other major cryptocurrencies into TRX, or a large increase in crypto investors.
Perhaps due to another collaboration or acquisition.
For Tron to reach $100 a coin it would need to increase its market capital to $1trillion!
The size would almost be immeasurable for a cryptocurrency and would be worth three times the value of Bitcoin.
Depending on how far Tron goes in becoming a true leader in cryptocurrency and a pinnacle part of a thriving ecosystem where demand for TRX became high, will depend on how realistic this target is.
Why Market Capital is so important for Tron
It isn’t possible to take a cryptocurrency price and compare it, in terms of size and value, to another cryptocurrency.
In fact, the price is almost completely irrelevant.
As we have seen, a cryptocurrency at $0.80 maybe a lot more valuable than one with a current price of $800.
For example, if crypto E has a current trading price of $5 but there are 50 billion coins in circulation it will have a much harder time increasing to $10 compared to the chances crypto F has increasing from $7 to $700 which has a current circulation of 50 million coins.
This is because of the amount of money within the overall market and the amount already invested into crypto D.
In the example above crypto E already has a valuation of $250billion, which would make this crypto the second most valuable on the market.
Whereas crypto F only has a valuation of $350million.
If crypto F began to gain traction and started to see substantial gains, the market would shift and potentially sell their holding of crypto F in exchange for crypto E, seeking a higher return.
Just 10% of the amount held of crypto E being sold off and moving into crypto F would see crypto E increase 2,000%, or 20x.
On the other hand, all holders of crypto F could sell and move this amount in to crypto E, and crypto E would increase by just 0.1%.
Therefore, a cryptocurrency with a much smaller market capital has a much better opportunity of increasing significantly if demand increases, and money moves across from other cryptocurrencies.
To understand whether Tron can reach $100 let’s compare its market capital with other cryptocurrencies, although I think we have already seen the impossibility of this happening.
Tron Market Cap vs Other Cryptocurrencies
Here is a table showing how the Tron (TRX) cryptocurrency compares to other top coins such as Bitcoin, Ethereum, Solana Dogecoin, Polygon MATIC and Decentraland:
|Polygon MATIC||$7.3 billion|
|Shibu Inu||$4.3 billion|
|The Sandbox||$762 million|
Could Tron Reach $100
Looking at all this analysis, it would be very difficult for Tron to grow by 200x now, or in the short to mid-term.
To reach a $1 trillion dollar cryptocurrency would be a huge milestone, and something even the mighty Bitcoin has not even managed to reach half of this value.
For any cryptocurrency to pass the $1 trillion dollar target it would need to become a major player in an essential and popular application or system whereby owning and holding TRX was key.
Not just within an ecosystem for cryptocurrency supports and holders, but one where those from outside the industry wanted to or needed to hold the coin.
This would be the only way Tron could reach a $100 a coin valuation in the long term.