This article is about several influences in the price of the CVC token. Each argument is watched separately and at the end there is a conclusion.

Argument: The USD price of a CVC token may not rise because the success of the token has nothing to do with the volume that comes from the success of the Civic company itself.

On first sight this argument seems to appear valid. Why would the price of the CVC token rise just because of the volume that comes from the growing user base of Civic? One could think that if the volume is increasing, it means that buy volume and sell volume is increasing and the price should then have fluctuations but no longer term price trends.

Well, here’s the catch: The validators in the civic network, which are validating ID’s need to stake a certain amount of CVC. And this amount is not fixed.

This means that the floating supply and demand is not equal. It’s unbalanced. When viewing at the figure below out of the newly updated whitepaper of Civic this might become a little more clear.

Simply look at the X and Y axis. The more ID’s a validator processes, the more CVC he needs to stake. This means that those CVC tokens are taking out of circulation, reducing the selling side of the overall volume.

So as requestors will have a growing need for CVC(since the requestors are growing businesses) the demand increases while the supply even decreases due to the implementation of a variable staking amount!

Argument: The USD price of a CVC token won’t rise because companies aren’t buying CVC from the free market but from the Civic company itself.

Yes and no. The price won’t rise immediately since within the first years of Civic (I call it the growth phase) there will be inevitably more supply than demand if pure speculation isn’t creating buying volume which drives the price upwards. BUT once a critical mass of users joined Civic, network effects will kick in. Below is a graph of the metcalfe’s law

The law states that the value of a network is proportional to the square of the number of its users. At some point there will be more companies that are out of the free-CVC-for-12-month-phase so that the demand will rise. And it will rise with every year after that.

Argument: The USD price of a CVC token may not rise because the token economics are unclear because of hidden metrics.

How much one verification costs is actually not known. So if one verification only costs 10 cent and the whole network verifies 1 million users a month, then it would only have an estimated volume of around 100k USD. Currently we know that Civic has nowhere near that many users, because the Android PlayStore download count is only at around 10k. Of course this is the very start of the company and those downloads are potentially way higher in future, but as long as the verification costs are too cheap then there might not be enough buying pressure in the beginning.

Summing it up

Investing in the CVC token is not for people who want to see almost immediate results. It’s for the people who are looking for real value in a project which grows over time and not just by hype. Yes, there are unknowns and of course the typical startup risks but hence the price is that low. I’m even pretty sure that there will be speculative cycles soon but everyone can draw their own conclusion about that. Analyzing ERC-20 addresses also shows that there is interest by the people to hold Civic. I feel really good to be invested in Civic. Same feeling I had when BNB was at 1$ or STEEM was at 0.1$. To sum it up even more here is an image.