After a rough start, Filecoin has managed to break into the top 10 leading cryptocurrencies by market capitalization. After overtaking Chainlink (LINK) and Theta Network (THETA), with a rally of 138% in one week and 418% in one month, FIL took over the tenth position.
Founded by Juan Benet, creator of the InterPlanetary Files System (IPFS), and developed by Protocol Labs after receiving $257 million in its Initial Coin Offering, the platform has managed to attract a lot of attention in China, as journalist Colin Wu reports.
Data shared by Wu indicates that FIL has seen a 30% increase in its trading volume for the last 24 hours on Huobi’s platform. The cryptocurrency has managed to reach a new all-time high based on increased buying pressure and demand for the cryptocurrency.
The daily trading volume stood at $24.2 billion. In contrast, the daily trading volume for Ethereum stood at $8.8 billion and $7.8 billion for Bitcoin. The rapid increase in price has had negative consequences for investors with short positions, as Wu notes:
FILDOWN, a short-selling leveraged token in Binance FIL, plummeted by 53%, with a turnover of US$3.4 billion, indicating a large number of short FIL liquidation in Binance.
Increase in institutional demand for Filecoin
Additionally, Wu recorded an increase in transactions for the FIL/USD pair on Coinbase’s Pro trading service. After FIL’s price surpassed the $180 barrier, “transactions with high credibility were recorded on Coinbase,” according to the journalist. Wu added:
Distributed storage has become popular. Filecoin continues to climb to 136U, HOT has risen by nearly 40% and 2500% year-to-date, its market value is close to that of HT, the token of China’s largest exchange.
FIL’s price appears to have increased following the launch of Grayscale’s Trust based on this and other cryptocurrencies to expand its product suite. In addition, the teams behind platforms Filecoin and Livepeer have announced a “co-mining” program. According to an official release:
Livepeer is launching a co-mining pilot with Filecoin to enable Filecoin miners to become Livepeer video miners while continuing to mine on the Filecoin network by storing transcoded video data.
Thus, miners of these cryptocurrencies will be able to obtain higher profits and “additional economic opportunities”. Filecoin’s mining mechanism requires miners to obtain token FIL to make a “bid/initial response”. The latter has contributed to the increase in buying pressure for the token.
Demand from companies and start-ups to use Filecoin’s platform also seems to be accelerating, as indicated by a recent report from its team.
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Trader Fiskantes believes the coin is “massively overvalued” and could see a 90% drop. This is mainly based on FIL’s increase supply that will double in the next 3.5 years. However, the high number of partnerships and interest from China could contribute to the prolongation of this token’s rally. At the time of writing, FIL is trading $190 with gains of 3.8% in the last 24 hours.