Update Oct 28, 2014: Information on the ongoing premining saga added.
Whatever gets high, must come down. Such is the case with most altcoins undergoing astronomical multifold gains. But the drop doesn’t usually happen so quickly.
Cannabis Coin had its share of glory when it rocketed by over 1000%, reaching a peak of 16,500 satoshi ($0.063) one week ago. The crypto-cannabis worlds were excited to learn that one Cannabis Coin would become redeemable for 1 gram of cannabis, starting at the “Yes We CANN” event at Phoenix’s Herbal Wellness Center.
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With marijuana prices typically ranging from $8 to $20 per gram, the coin was still a bargain. Technically, it could have exploded another 100-fold- which may have been a new record for altcoins- and still worth its price.
But the coin has since lost its luster, shedding as much as 85% in just one week. It now trades at 2900 satoshi, off its 2500 satoshi lows from two days ago. Volume has dropped to the equivalent of only $17,600 in the past 24h.
After getting “as high as” 12th in market cap rank, worth over $5 million, CANN has now plummeted to 33rd, right behind Ethercoin and worth $652,000.
Destabilizing the coin’s value has been uncertainty over the fate of millions of premined coins. Controversy continues if these coins are still accessible to a core developer or have been “burned”. The developer’s credibility has been challenged, and the situation has been complicated by a hard fork early on in the coin’s life allowing it to undergo a change in hashing algorithm. Many of those concerned more with the project to support cannabis users, and less with its crypto elements, are disillusioned by “altcoin antics” not unseen before.
Some have also pointed out that a preroll, made with “leftovers”, can be obtained for free at many dispensaries.