Storj, which rose to prices as high as $2.22 earlier this month, has tumbled after a brief moment in the all-time-high club. Lots of factors at play, primarily the fact that Storj farmers are expected to dump any time the price goes up, as it is their only way to derive any value from the investment. The price rise itself can be attributed, as we previously discussed, to the hype surrounding Filecoin and its accredited investor requirement as well as general market bullishness.
Looking at where all the volume is taking place, it seems that Bter traders may have dumped Storj in favor of things like Qtum, OMG, and EOS, judging by the recent volume across pairs.
It’s hard to be surprised that many Storj token holders decided to take profit at $2+. There are plenty of reasons to worry for the long-term health of Storj Labs, but this author doubts this is the last profit-taking opportunity.
Meanwhile, an alternative to Storj called Siacoin, which operates in a different way completely but accomplishes the same task, has seen modest gains in the past few days.
Siacoin did not benefit nearly as much as Storj did from the tertiary hype surrounding Filecoin. It has never seen a higher price than 3 cents per unit. This is in large part due to the massive supply – 28 billion coins and growing – so one cannot expect extremely high prices on this token under any circumstances. We can imagine the Sia hitting 10 cents, however, at some point in the future, which would make their market capitalization something like $2.8 billion if it happened today. If you start to get too much higher than that, the gods themselves would have to intervene to shake enough capital free from other cryptocurrencies and markets.
The road to dime parity for Siacoin is probably long and arduous, but it’s imaginable when considering the amount of money that Filecoin has raised – there is still a lot of interest in decentralized cloud storage, to say the least. From a high level perspective, it would seem that the value of the storage itself will go down, and this could make the token even less valuable since there are so many of them in the breeze.
In analyzing new technologies, we have to keep in mind that we know nothing. Therefore, all of the above regarding Siacoin could be proven false this very evening. Anything is possible, but there is a proportionally lower ceiling on any cryptocurrency with a massive supply – for obvious reasons.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:35 AM