5 Reasons Why to Invest in Crypto.com and 5 Reasons Why Not to Invest in Crypto.com

We also explain how we came to our final decision.

Dear Crypto Asset Investors,

This week’s edition of the Crypto Research Report Newsletter focuses on two tokens - CRO and MCO. These are both tokens that are issued by the company Crypto.com. To be clear, we have not been paid by Crypto.com to write this article. We invested a small amount in both CRO and MCO in January, 2020. This week, we took a deeper dive on www.crypto.com, because we received a tip from a fellow cryptocurrency investor.

In this sneak peak of tomorrow’s newsletter, we cover some of the Pros and Cons of investing in the token CRO, for the full analysis of CRO, and our final decision on whether to invest or not, subscribe to the newsletter. Until April 6th, the newsletter is 20% off.

To Invest in CRO or Not to Invest

Last week, the self-proclaimed cryptocurrency investment guru, Teeka Tiwari, announced this year's 5 Coins to $5 Million during his “Jetinar” on a private jet. In this list, which he charges over $400 to read, he included the coin MCO, but he did not include the coin CRO. This newsletter explains why we think that Teeka is wrong. Our analysis provides strong evidence that CRO will outperform MCO during 2020. The 2020 Return for CRO is already double MCO’s. The Year to Date Return for CRO has been 33% whereas MCO has only been 16%. This is in contrast to Bitcoin’s -10% Return since January, 1, 2020.

Why to Invest

1. Crypto.com’s CRO is Relatively Underpriced Compared to Bitcoin

Since Crypto.com’s CRO started trading in December of 2018, the average cost of 1 Bitcoin in terms of CRO tokens has been 191,166. The current exchange rate is 159,363 CRO for 1 Bitcoin. This can provide evidence that CRO is relatively underpriced compared to Bitcoin.

2. Crypto.com’s CRO has had Enormous Growth Over the Past Year

In January of 2019, CRO was ranked 111 on Coin Market Cap. CRO is currently ranked 19. Between January 2019 and the current date in March 2020, the market capitalization of CRO grew 17 times from $30 million to $572 million. During the same time, Bitcoin’s market cap only grew 2 times, from $67 billion to $117 billion.

However, Bitcoin’s daily exchange traded volume grew twice as fast as CRO over the same period (Jan 2019 to March 2020). Bitcoin does about $50 billion a day in exchange volume while CRO does approximately $11 million.

Why Not to Invest

1. Crypto.com’s CRO is Highly Correlated with Bitcoin

Since Crypto.com’s CRO started trading in December of 2018, the average 60-Day Rolling Correlation of CRO’s Returns and Bitcoin’s Returns has been a positive 0.40 or 40%. However, this correlation has become increasingly positive since the beginning of 2020. The correlation is currently 0.95 or 95%. This means that if Bitcoin goes down, CRO goes down, and if Bitcoin goes up, CRO goes up. This can provide evidence that CRO is not a good diversifier in a crypto asset portfolio.

2. Crypto.com’s CRO has 100 Billion Total Supply

CRO is not scarce. CRO has a total supply of 100,000,000,000, and only 14,231,050,228 has been released to the public so far. We suspect this is why Teeka Tiwari put MCO on his list instead of CRO. MCO only has a total supply of 31,587,682, slightly more than Bitcoin’s 21 million.

The company, founders, and advisors of Crypto.com hold tons of MCO and CRO, which is always worrying. 30% of MCO tokens were sold during their 2017 ICO crowdsale, 25 percent was retained by the Monaco founders, 10 percent was held by the company, 5 percent was awarded to advisors, and 30 percent was held as reserve tokens.

When Crypto.com created CRO, they controlled 100% of the 100 Billion tokens. They announced that 30% or 30 Billion would be released to the market over a 5-year period following a pre-defined schedule. The remaining 70% or 70 Billion was controlled by the company. In November of 2019, Crypto.com announced that they would lock up 40 billion of the coins for a three year period, and 20 billion would be locked up until mainnet launch. The mainnet launch is expected during the next 1-2 years. The price may go up because of the mainnet launch, but there will also be downward pressure on the price due to the unlocking of 20% more of the coin’s supply.

According to Coin Market Cap, the total supply in circulation is 14,231,050,228 coins. According to the CRO white paper on Crypto.com’s website, 27 million CRO were released to the market on a daily basis during CRO’s first year from November 2018 until November 2019. In the second year, which we are currently in, 22 million CRO are sold to the market. There were also a series of eight airdrops of CRO between December 2018 and June 2019 that dropped 166,666,666 each time. When we added up the daily CRO released by the protocol plus the airdrops, we get a total of 14,163,333,328 coins.

So, we cannot account for the total 14,231,050,228 via the information that has been provided in the white paper. However, the white paper states that 10% of 10 billion of the coins were at the disposal of the company for community development. This leads us to believe that a few millions of these 10 billion coins have also been released.

To summarize, CRO had an enormously high inflation rate of over 10% in the first year, and they currently have an inflation rate of approximately 8%.

Thank you for reading this free sample of the Crypto Research Report’s Weekly Newsletter.

If you would like to read the’s newsletter that discusses our final decision on whether to invest in CRO or not, subscribe for our monthly subscription for only $12. 79 instead of the normal $15.99, because we currently have a 20% off discount running!