Tron (TRX) – the made-up token underpinning Justin Sun’s empire – has, in the past six months, gained almost 50% versus Bitcoin – the question we receive more and more often from our clients: “Is now the time to invest in Tron?”
The short answer is:
The moderately prolonged answer is:
It depends.
We believe that people are free to make their own decisions and choices – and that they will have to live with and bear the consequences of these choices.
So can plowing your funds into Tron turn you into part of the landed gentry?
Unlikely, but who are we to know or judge.
In the crypto space, fundamentals, rationality or moral behaviour are often meaningless or in short supply, and while we have seen more people than we would like ruining their finances gambling on various crypto tokens… a few of them also turned out to become incredibly wealthy.
The likelihood that you will become part of the latter group rather than the former by buying Tron is infinitesimally small and we would strongly advise against it (if we were in the position to give financial advice) and we decisively do not endorse degenerate gambling behaviour.
With that out of the way, now let’s take a look at why people are asking us the question of whether “Tron is a good investment” or “should I buy Tron now”.
The obvious one:
Over the past six months Tron gained almost 50% in terms of price against Bitcoin, the largely unchallenged anchor around which the whole “crypto world” has spun up and is measured against.
Now, there is a very legitimate point to make that native market demand for Tron indeed does exist and that it is actually increasing.
You can dislike it all you want:
But looking at the numbers, one cannot avoid recognizing that Justin Sun – all his known and unknown shady business dealings aside – may very well be the most successful Fintech entrepreneur of the 21st century.
Tron started out as just one more of the countless Chinese Ethereum copycats to capitalize on the easy money flowing into all kinds of “token offerings” during the unhinged 2017 bull market.
But – and you have to give Justin Sun some credit for these achievements – instead of withering away like all the other token fundraising schemes from that era (NEO, EOS, OmiseGo… and dozens of others – remember those?) Tron “delivered”.
Thanks to very skillful navigation and negotiation (and his close partnership with his pal CZ at Binance which took over the crypto world by storm since 2017) he moved Tron into a position where it was ready to become “the network of choice” for the transfer of the world’s largest stablecoin Tether.
As the global demand for USD “derivatives” in the form of stablecoins skyrocketed in emerging markets around the world, providing a refuge from their own even weaker domestic fiat currencies and a tool to conduct fast and easy cross-border commerce, neither the Bitcoin blockchain (via the OMNI metalayer) nor the Ethereum blockchain was able to handle the resulting transaction load without driving up transaction costs to uncompetitive levels.
Justin Sun was ready to strike.
Via his connections and integrations with various key players in the Asian market he began to roll up the world – making USDT Tron the preferred settlement platform for much of the emerging world, be it South America, Africa or his “home turf” across Asia.
How did he do it?
Well, to hell with “decentralization” – the Tron blockchain for all we know runs at best on a handful of servers under full control by Justin and his clique… hence “scalability” is not a serious issue anymore.
You might not like it, but when it comes to pragmatism and “throwing out” “unnecessary” ideological baggage in favour of near-term profits, the Chinese businessmen of the 21st century are a category of their own.
Tron is a blockchain which is “faster” and “cheaper” than any of their serious competitors – and hence has won critical market share and the network effect.
Is it “decentralized”?
Hell no, it isn’t – but as you also must admit:
The vast majority does not care.
As long as they can get their payments done quickly and hassle-free, they will go with what works – and currently, Tether on the Tron Blockchain provides this customer experience.
As the charts below show:
The Tron blockchain is seeing increased adoption rates across the world.
The numbers are clearly trending upwards in terms of amounts of value transferred via the network, the number of network participants is steadily increasing as well.
The fact that these numbers point upward amidst a bear market clearly indicates that this uptake is not driven by speculative ebbs and flows in the crypto space, but by a very organic and expanding market demand.
Tether makes it possible for the first time for “the other six billion” with no access to the Western financial system or hope of ever qualifying to open an account with one of their “esteemed” financial institutions to access dollars.
Transferable instantly around the globe – serving and powering commerce without being held back by regulatory red tape or lack of access to a globally accepted medium of exchange.
Charts initially compiled by Sébastien Derivaux
The highly centralized nature of Tron also made it possible to swiftly adjust the “Tokenomics” by decree of emperor Justin Sun when he deemed it prudent to do so.
And while we avoid covering all the intricacies of the deployed change, you can see in the tables below that it resulted in higher “gas” (or in Tron-speak: “energy”) fees collected per transaction, increasing the “natural demand” for TRX further by users of the Tron Blockchain.
Now, does all of this make Tron better money than Bitcoin?
If you have the need to transfer USDT – you will likely need a small amount of Tron to power these transactions, you might otherwise get lucky with Ethereum – any other networks only have a minor fraction of market penetration.
There are whole books written about “what makes good money”, we won’t go into detail in this post about this key topic to guarantee (or derail) human flourishing… – but the short answer simply:
Not a chance – physical realities make this an impossibility.
Is Tron a “good investment”?
Well, if you operate under the assumption that all of these token schemes are first and foremost spun up to benefit insiders and turn your money into theirs via various shenanigans… – you are entering a game where the odds are stacked against you.
It is a game – and if you believe you can outmaneuver the key players in control of these token schemes who are certainly highly capable, high-IQ and without too much baggage in terms of “ethics and morals” besides a relentless drive to win… we wish you good luck, because you will need it.
As one single and more recent glimpse into how the “Chinese Crypto mafia” operates, you might want to take a look at a recent thread of Dylan LeClair where he takes a sneak peek at how Justin Sun and the gang are currently draining depositors’ money out of his latest acquisition Huobi, swapping it out for more made-up IOUs.
A similar tactic which had already been deployed at the once leading altcoin exchange Poloniex.
This type of “vulture capitalism” is not uncommon in Western financial markets, the practice is widely known as “asset stripping”.
You acquire the asset, drain it of any valuable resources contained therein (in this case: depositors’ money) – and then…”…après moi, le déluge”.
A bet on Tron is basically a wager that Justin Sun’s shell game will continue as successfully as it has over the last six years.
So far, he has been exceedingly skillful in finding his targets and avoiding accountability for various dubious tactics employed in his acquisitions and business dealings.
Furthermore, Tron has achieved extremely widespread market penetration and is nowadays undoubtedly one of the top five cryptocurrencies in terms of legitimate user count.
On the other hand, more than one “high-flying crypto star” and paper billionaire experienced a rather sudden downfall and collapse of their empire and severe judicial prosecution in recent times – and if the persistent rumours around the solvency of Binance materialize, the story might end sooner than anticipated by most given the close entanglement of the conglomerates of CZ and Justin Sun.
Now, if you already bought your bag of Tron and feel not so certain anymore if this was a good idea:
You can turn it into better money right away with no KYC required – or cash it out for Vietnamese Dong to have some fun in Vietnam rather than hoping for the – likely illusory – chance that Justin Sun turns you into a wealthy man.
