Filecoin (FIL) is one of the most popular currencies in the cryptocurrency storage sector. Over the past month, the price and market value of FIL have reached new levels. On April 1, the coin reached $ 233.68 and entered the 10 largest cryptocurrencies by market value.

Essentially, Filecoin is a decentralized cloud storage network that allows users to reward by selling redundant storage space on an open source platform. Filecoin is produced by Protocol Labs.

While FIL’s time in the top ten list was short-lived, it is important to note that the fully diluted market value of Filecoin peaked at $ 450 billion. That’s nearly half a trillion sacred dollars that Bitcoin has held recently for 10 straight days.

Over the past 30 days, Filecoin has shown a notable profit of around 440% from trading at around $ 42 for the $ 184 line trade. Even though the price is down about 20% from an all-time high on April 1st, the fact that it settled at three times the price before the wave is an impressive feat in itself.

On March 17th, the FIL token received a new push from the market. Grayscale Investments benchmark index of institutional interest in cryptocurrencies announced new funds that will invest in five cryptocurrencies. These tokens are LINK, Filecoin, Livepeer (LPT), Basic Attention Token (BAT), and Decentraland (MANA) from Chainlink. As a result of this announcement, the price of FIL increased by 40% within 48 hours, indicating that society and the market as a whole have responded positively to this development.

When we talked about why Filecoin is attracting corporate interest, Marie Tatipeau, chief marketing officer at Gate.io, a cryptocurrency exchange, said: “Data is the most valuable commodity today, and now there is a race to find the cheapest and most efficient way to store data.” Martin Gaspard, an analyst at CrossTower, Digital Asset Exchange, told Cointelegraph about the impact of this announcement on the markets:

As of April 5, 2021, the Filecoin Trust only had $ 8.1 million in assets, according to Grayscale. That’s a very small amount compared to the recent over $ 1 billion trade volume that CoinGecko showed, indicating that there are other important factors behind the price hike. ”
Cameron Winklevoss, co-founder of Gemini Exchange, indicated that he was not surprised to see the price of the token soared. He cited the main proposals proposed by the Filecoin project as “network storage” as the main driving forces behind the recovery. Tatibouet also commented on this, stating: “The Bitwise 10 Crypto Index Fund and Grayscale FIL have added, while The9 Limited and New Universal have invested millions of dollars in Filecoin mining.”

However, many different factors are at play here.

The Chinese market plays a crucial role in the Filecoin coin
Chinese crypto journalist Wu Blockchain tweeted that on the day FIL peaked, large volumes are coming from China’s largest exchange, Huobi, with a 24-hour trading volume of $ 24.2 billion. That size was nearly three times the size of Ether (ETH) and Bitcoin (BTC) on the same day. Gaspard went on to state:

“Filecoin is very popular in China and is getting a lot of interest from Chinese miners who have to provide the FIL token as collateral, which increases the demand for the token. Also, in the absence of BTC and ETH mining, Filecoin mining looks an attractive. An option for these miners.”
Huobi has captured nearly 40% of Filecoin’s 24-hour turnover since April 9, according to data from CoinGecko. These data confirm the view that interest in Filecoin is mainly driven by private investors and miners from China. Splashing around this symbol in China is so much that subway posters advertise Filecoin.

This is similar to the phenomenon of Bitcoin stickers being set up in Soho, London, except that Filecoin is a clear advertisement to lure retail investors to buy the token.

Ruby Liu, market analyst at OKEx Insights, OKEx cryptocurrency exchange research group, told Cointelegraph, “The Filecoin market is developing very quickly and Chinese miners account for more than 95% of Filecoin contract. Since China is the global center of cryptocurrency mining, it is only natural. The market is very sensitive to the mining economy. Tachibue also stated that the reason for the high demand is that mining FIL is “much cheaper than mining Bitcoin and Ethereum.”

In August 2020, the Chinese government announced its new Internet infrastructure development plan which will focus on expanding innovation in 5G, artificial intelligence and the Internet of Things. This plan has the potential to impact the Filecoin ecosystem as decentralized cloud storage is on the agenda.

Source: CoinTelegraph

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