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Request launches to much hype; falls below ICO price

Request launches to much hype; falls below ICO price

Request.Network launched today, sparking a much anticipated high volume trading session that saw EtherDelta grind to a halt and the Ethereum network processing thousands of backlogged transactions. 

Contrary to a lot of community expectations, the ratio quickly fell below ICO pricing (0.0002, or 1 ETH:5000 REQ) and after just under 6 hours of trading sits at 0.000192. There are 2 main reasons for this:

Firstly, whilst the project had a 100,000 ETH hard cap in the token sale, an additional 20,000 ETH was sold to early investors and strategic partners. These early entrants got a 20% bonus (6,250 REQ per 1 ETH) and as a collective are likely the major factor behind the large immediate sell off - around 15% of the investors are still making a large (for institutional investors, if not by crypto standards) profit, even at this suppressed price. A great summary provided by u/karotkason on Reddit illustrates the sheer volume of selloff by these early investors. 

The heavy volume ($5m+ so far today) on EtherDelta alone is borne out by the large sell walls, highlighting the impact of this money. 

 Current depth chart for REQ on EtherDelta (red reflects sell walls) 

Current depth chart for REQ on EtherDelta (red reflects sell walls) 

Secondly, the Bitcoin hardfork looms over the crypto space yet again; all altcoins have been experiencing major dips as money flows (counter-intuitively to anyone new to the space who missed the last hard fork) into BTC. This was arguably the worst time that Request could have begun trading for those wanting a quick flip - they launched too late for the recent alt boom and just days before the hard fork will be resolved. Compounding this, trading began at 7am UTC, a time when most Americans (the principal market locked out by the ICO rules) were asleep. The quick selloffs meant no real buying pressure or FOMO could ever begin. 

I contributed to all 3 days of the Request ICO and bought in further as the price slumped to 0.00018 this morning. There are some other recent ICO's that I'd be wary of holding as they have dipped below ICO prices (PayPie and even AirSwap) but I'm not overly concerned about Request. I believe that REQ will have a violent push upwards, either in the coming days or (more likely) following the 25th October and the hardfork. All of the reasons that initially made it a solid buy beyond the core idea still hold true: 

  • The market cap is low
  • It will benefit from comparisons to OMG, even if they are at pains to point out the differences
  • The first YCombinator backed ICO
  • Thanks to the ICO structure, a large and distributed community already exists

Recommendation: Buy below 0.0002

Disclaimer: I hold REQ as of 20/10/2017

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