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Filecoin (FIL) has been one of the most talked-about digital assets of the past week. The cryptocurrency finally launched this week after years of development and after a rapid $200 million ICO in 2017.
Unfortunately for FIL holders, an analyst says that the cryptocurrency is currently under threat due to a miner crisis.
Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom
Filecoin Is Facing a Miner Crisis
Analysis by Twitter user Nico Deva suggests that Filecoin is in the midst of a miner crisis that is only known in China, where the project has gained much popularity.
Deva explained that per his calculations, to actually earn FIL, storage miners that store files for the network actually have to buy FIL to ramp their nodes up to full capacity:
“Here in China people are disgusted, 恶心, this is the word repeated. A napkin calculation shows you early on that your mining system that requires $20k hardware also forces you to *buy* more coins. In a country where ponzinomics is an art, the 2017 poster boy just blew it.”
He explains that miners are at a point where they will have to “keep ramping capacity and splurge with your 1 FIL/day from your $20k hardware, or just sell everything at the current dumb fully diluted market cap.”
Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin
FIL To Drop as Well, Analysts Say
Analysts also say that it’s unlikely that FIL’s price level holds up at current levels.
Source: FILUSD from TradingView.com
Brian “Ledger Status” Krogsgard recently noted that Filecoin is likely to drop over time as there are two billion coins that will meet the market over time due to vesting periods and mining. If FIL was to hold current levels amid all that inflation, the market capitalization of this project would exceed that of Ethereum and other top projects in the space combined.
“There are 2 billion $fil that will meet circulation over time. Every single investor LOVES these prices. Filecoin is playing hot potato before a very long and painful march down. Beware.”
There are 2 billion $fil that will meet circulation over time.
Every single investor LOVES these prices. Filecoin is playing hot potato before a very long and painful march down. Beware.
— Ledger 🇺🇸 Prometheus of the Plebs (@ledgerstatus) October 15, 2020
Analysis by a venture investor in the space indicated that for Filecoin to stay afloat at current prices, an approximated $20 million worth of fiat or Bitcoin must be invested in the asset each day.
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock Price tags: filusd, fileth, filbtc Charts from TradingView.com Filecoin (FIL) Faces a Miner Crisis 72 Hours Into Launch, Analyst Says
