Darkcoin is continuing its relentless rally, doubling in value since we last reviewed the coin one week ago. It has now gained a staggering 1300% during the past month.
It is now trading for the equivalent of roughly $13 (0.023 BTC), slightly off its highs above $14. Its performance has propelled it past Peercoin into third place in market cap rank. Its total worth is now $58.7 million.
What's more is that until now, coins suddenly breaking into the upper echelons have done so on relatively light volume. Good examples are Auroracoin and Isracoin. Their large (pre-mined) supplies and pumped unit prices combined for lofty market caps. Under the litmus test of increased volume, unit prices gravitated back to earth and the coins' value crumbled.
With Darkcoin, however, volume has been heavy. Currently, nearly $4 million worth has been traded in past 24 hours, the bulk of which has taken place on MintPal and Cryptsy. This makes for a close second behind Litecoin in dollar-based trading volume. Last week, there were periods where its volume was higher than Litecoin's.
It would therefore appear that traders are genuinely willing to pay for the coin on a consistent basis, at least for now. Its turnover ratio- the amount traded in 24h relative to its total supply- is roughly 7%. By comparison, Bitcoin is 0.4%, Litecoin 1.4% and Dogecoin 2.2%.
Its behavior is highly reminiscent to that of Dogecoin during its run-up in February. Dogecoin dominated trading volume on Cryptsy and Vault of Satoshi. At one point, it too surpassed Peercoin in valuation. Although it has since pulled back, it has still retained the bulk of its gains- perhaps a good sign for Darkcoin. Parallels have also been drawn on the coin's reddit, and even a "Shibe" dropped in to see what all the excitement is about.
The big question is if this is yet another passing fad, or is there something fundamental going on. Last week, the coin's touted strength in facilitating anonymous transfers, via DarkSend, was suggested as a fundamental catalyst. Other factors that have been proposed are energy efficiency in its mining algorithm and a potentially more favorable reward scheme than Bitcoin's.
In any event, such a surge in value in so short a time calls for a major correction when not linked to any groundbreaking fundamental development. If it comes down to the laws of supply and demand, we'll soon reach a point where traders will race to take profits. After that, the outlook remains unclear.
