Filecoin's price has been falling in recent days as investors questioned the cryptocurrency's utility and risky assets came under pressure from hawkish central banks. The price has already fallen more than 98% from historic highs. Filecoin has gained in the past thanks to the growing belief that blockchain technology will change the way data is stored:
- Filecoin is a major blockchain platform that seeks to compete with the cloud market of dominant platforms provided by Amazon, Microsoft and Google by enabling decentralized data storage. Instead of relying on huge, centralized storage servers located globally, Filecoin allows anyone with free storage to sell their free bandwidth. Anyone with a smartphone, laptop or home data server can provide storage to the network and receive FIL cryptocurrency. Other projects aiming to revolutionize the cloud industry include Storj, Arweave and Siacoin. All of them have been experiencing dynamic declines recently:
Almost $5.7 million of FIL's long positions were liquidated on December 16. Source: Coinglass
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app- On the demand side, there are concerns about whether people and companies still have the demand for a new decentralized storage platform in view of the fact that the cloud business of Amazon, Microsoft and Google, are doing very well. Traders may question the usefulness of decentralized data storage protocols with huge and growing capacity because there is still not enough demand to use it optimally;
- According to Filecoin, its storage platform has 17.6 million terabytes of capacity. It is unclear how much of this data is used by customers. One company that uses Filecoin's cryptocurrency is OpenSea, an NFT giant built on the Ethereum blockchain. It would likely take a sharp increase in demand for NFT tokens to renew the network's usefulness. On OpenSea, monthly trading volume has fallen to $159 million from about $4.8 billion at the beginning of the year, a drop of about 97% and almost perfectly reflecting the scale of Filecoin's decline from $236 to just $3 today.
Filecoin, M15 interval. Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
