The momentum of artificial intelligence (AI) coins seems to have stalled for now. However, another group of altcoins is on the rise. Altcoins tied to storage protocols soared last week, with one analyst tying the spike to increased use of the platforms. Here are the details…
Storage-focused altcoins rise
Decentralized storage network Filecoin’s native utility FIL was among the top performers, gaining more than 62 percent to $8.10 on Tuesday, from just over $5 a week ago, according to data. FIL has outpaced Bitcoin (BTC) and Ethereum (ETH), which have risen 10 percent and 7 percent respectively in the past seven days. FIL’s leap came as Filecoin prepared its Filecoin Virtual Machine (FVM) for a launch in March.
FVM creates a “runtime environment” for smart contracts. Messari research analyst Mihai Grigore said that FVM is expected to enable “new applications for smart contracts,” which will lead to increased usage. Colin Evran, ecosystem leader at Protocol Labs, the company behind Filecoin, tweeted that writing smart contracts in Filecoin allows users to create “DeFi contracts”, their own “storage markets”, “on-chain cloud solutions”, “data DAOs”.
Other computing and storage networks, including cloud storage networks Storj (STORJ) and Siacoin (SC), were up 16 percent during the week. The informatics index, which measures the market value-weighted performance of computing protocols, increased by 16 percent compared to last week. “Competitive pricing over Amazon Simple Storage Service (S3) makes decentralized storage an attractive option for Web2 organizations looking for cost-effective alternatives for storing large amounts of archival data,” Grigore said.
How are other markets moving?
According to cryptokoin.com data, BTC was trading at around $24,030, down 3 percent recently, while ETH was changing hands at $ 1,637, down 3.7 percent. Analysts at crypto exchange Bitfinex said Bitcoin’s recent rise to over $25,000 last week was driven by both “extremely leveraged long positions” and “liquidating overly eager shorts.” Investors holding a long position believe that the value of an asset will increase, while those holding a short position believe that the value of an asset will decrease.
Data from crypto data provider Coinglass shows that traders who bet on price increases have liquidated their $130 million long positions in the past seven days, while those who bet on price drops have liquidated about $179 million of their BTC shorts. “Historically, this type of price action where both long and short positions were deleted at the same time resulted in a range formation,” Bitfinex analysts said. He also added, “The most likely move forward is partially positions and waiting for the range to form without a strong directional divergence.”
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