Auroracoin’s market capitalization surpassed LTC on March 3rd and became the second largest democurrency in the world.
The trick behind Auroracoin is that the issuer promised to give 10.5 million coins, half of the total coins, to Icelanders. So the coins available now in the market are only 100,000, about $ 6 million, only 1 / 100 of its total size, and much of the coins available are mined by the market maker. The market maker took advantage of foreigner’s inferiority of math and put an attractive advertisement.
If the issuer gives the 10.5 million coins to Icelanders as he promised, each Icelander will get 31.8 coins, about $ 3,180 at current price. So what do you think Icelanders will do? Yes, they will sell the coins. Therefore, on March 25, price of Auroracoin will inevitably collapse. I estimate its market capitalization will stabilize around $ 30 million.
If I were an Icelander, first of all I would thank Auroracoin team for such a big gift, and then I would choose to exchange the coins into BTC which can be used worldwide. Auroracoin can only be used in Iceland which is barely producing anything because of its cold weather; on the contrary, BTC can purchase a variety of goods online.
In conclusion, for Auroracoin development team, the result may not be optimistic in my opinion, they may “plant melons but finally get beans”. There will be 330,000 more users of BTC, leading to a significant increase of the market value of Bitcoin.