InvestorPlace’s Alex Sirois recently questioned the idea whether XYO Network (CCC:XYO-USD) was the next Shiba Inu (CCC:SHIB-USD) or Dogecoin (CCC:DOGE-USD).
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First, without ever writing about this tiny cryptocurrency, I’m probably the last person to be discussing this subject. That said, I’m confident it’s not the next anything, other than the next way for people with too much money to speculate.
Secondly, why would anyone in their right mind want to be the next Shiba Inu or Dogecoin?
I don’t believe XYO Network is headed for decentralized fame and fortune. Here’s why.
XYO Network Market Cap Is a Pimple
I looked at CoinMarketCap to get an idea of the size of the cryptocurrency. Unfortunately, it’s not in the top 100 for market capitalization. In fact, at $360 million, it is the 141st-largest cryptocurrency. By comparison, SHIB ranks 47th at $2.9 billion, and Dogecoin is 10th at $26.9 billion.
It’s clear that the top 20, as laid out by Coindesk, are the only cryptocurrencies that serious investors ought to be following.
According to Finviz.com, 1,011 stocks are trading on Nasdaq with a market cap of $360 million to $2 billion. On the NYSE, there are approximately 729 stocks in that range. That’s more than 1,700 options. And each of these stocks is much easier to evaluate than XYO Network.
It seems crazy that someone would risk their hard-earned capital on such a small cryptocurrency when they could do the same with stocks but at least be given some idea of the company’s potential value.
That said, maybe some of my InvestorPlace colleagues have observations I haven’t considered at this point. But, of course, I’m always open to changing my mind about an investment.
Even one as small as XYO Network.
XYO Network Has Real Utility
InvestorPlace contributor Mark Hake wrote about XYO’s utility on Sept. 21. Specifically, he suggested that retailers could use XYO Network to track the traffic count of other competitors. As someone who’s written extensively about retail stocks, I’m intrigued by the possibilities.
“All the geomining rewards work off of the COIN app (not the same as the Coinbase app), which you download onto your smartphone. In essence, you give up your location and run both a foreground and background screen to somewhat passively earn rewards. It is somewhat passive since you have to update your location every 90 minutes or so to continue earning rewards,” Hake explained how the XYO Network uses location data.
The XYO Network Foundation website provides examples of industries and how they might use XYO to create secure location-data ledgers. For instance, in the e-commerce business, delivery companies could use XYO Tokens to incentivize people receiving deliveries to reveal their location data securely.
In February 2019, it announced a partnership with Nuggets, an e-commerce payments and ID platform. The two parties still work together, according to XYO’s partners’ page.
“This new partnership with XYO means we now provide users with a completely private end-to-end purchase and delivery process. They don’t need to share any personal information with any third parties at any point,” Alastair Johnson, CEO and Founder of Nuggets, said at the time. “This is the final piece in the puzzle of personal data privacy and security for e-commerce transactions.”
Now, I’m not about to run out and buy some XYO tokens, but if it does what it says it can do, it meets my utility sniff test. And that’s the only way I’ll ever recommend XYO in the future.
The Bottom Line
When given this assignment, I was skeptical that I would find anything to like about XYO Network. However, after learning more about the possibilities for its location data ledgers, I’m at least willing to study it further.
However, as my InvestorPlace colleague Alex Sirois recently wrote, there’s been “little in the way of substantive progress at this point.”
For this reason, I think most crypto newbies should sit on the sidelines gathering more intelligence about XYO Network’s utility. To buy based on the fear of missing out is not a legitimate reason to invest in anything of tangible value.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.
