Filecoin, a digital payment system and cryptocurrency developed on top of the InterPlanetary File System (IPFS) has recorded a value of $ 450 billion in diluted market value.
The blockchain also allows its users to rent unused hard drive space to store and retrieve data. The model is similar to Snowflake which completed the largest software IPO in history in September 2020.
Here are three possible reasons why FIL prices have soared in recent times:
High Demand In Chinese Community
Based on observations, in 24 hours, the price of FIL jumped over 30%, moving to an all -time high (ATH), $ 237.24 last night. It made FIL’s trading volume on Huobi in 24 hours reach $ 24.2 billion, three times that of ETH2, $ 8.8 billion and Bitcoin $ 7.8 billion.
Strengthening Technical Momentum
Rising FIL prices also led to increased open interest on major futures exchanges. Based on data from Bybt, open interest for Filecoin has increased by 46.37% in 24 hours.
Still, investors known to Waro argue that when a cryptocurrency shows a strong uptrend, then it is difficult to make a profit at the peak. He explained on the Twitter page @warobusiness: "The likelihood of you getting murdered trying to catch a top short is higher than you shorting the top."
Because of the tweet, FIL saw a 23% decline in 45 minutes across major exchange platforms.
Powered By Ethereum
Over the past four years, Filecoin has emerged uniquely as a layer 1 blockchain while others struggle as Ethereum competitors.
Ethereum analyst James Spediacci told decentralized cloud storage with IPFS is an innovative technology that adds value to the blockchain space especially benefiting Ethereum. He said: "If you dumped FIL at $ 20, you might have missed out."
At the time of writing, FIL is trading at $ 194.98, up nearly 6% in 24 hours.
