Filecoin, Storj Tokens outperform Bitcoin due to increased use of decentralized storage protocols
The native tokens of shared storage protocols have risen sharply in the past week, with one analyst attributing the rise to the platforms’ increased usage.
Decentralized storage network Filecoin’s original utility FIL has been among the best performers, rising from just over $5 a week ago to $8.10 on Tuesday, a more than 62% gain, according to CoinDesk data. FIL has outperformed bitcoin (BTC) and ether (ETH), which have risen 10% and 7% respectively in the past seven days.
FIL’s jump comes as Filecoin prepares the Filecoin Virtual Machine (FVM) for an unveiling in March. FVM creates a “runtime environment” for smart contracts. It is expected to enable “new applications for smart contracts,” leading to increased usage, Messari Research analyst Mihai Grigore told CoinDesk in an email.
Colin Evran, ecosystem manager at Protocol Labs, the company behind Filecoin, tweeted that writing smart contracts on Filecoin allows users to “create perpetual storage contracts” and their own “storage market,” “on-chain cloud solutions,” “data DAOs,” and “DeFi contracts.”
Other data and storage networks, including cloud storage network Storj (STORJ) and Siacoin (SC), are up 16% for the week. The CoinDesk Computing Index, which measures market capitalization-weighted performance of computing protocols, was up 16% in the past week.
“Competitive pricing, relative to Amazon Simple Storage Service (S3), makes decentralized storage an attractive choice for Web2 devices seeking cost-effective alternatives for storing large amounts of archival data,” Grigore said.
On Tuesday, BTC recently traded at around $24,273, down 2.2%, while ETH changed hands at $1,647, down 3.5%.
Crypto exchange Bitfinex’s analysts said bitcoin’s recent rally above $25,000 last week was driven by both “overleveraged long positions” and “liquidating overzealous shorts.” Investors who hold long positions believe an asset will increase in value, while those who hold short positions see an asset decrease in value.
Data from crypto data provider Coinglass shows that traders who bet on price increases liquidated $130 million of their long positions, while those who bet on price drops liquidated about $179 million of their BTC short positions over the past seven days.
“Historically, this type of price action, where both longs and shorts are wiped out at the same time, has resulted in a range formation,” Bitfinex’s analysts wrote in an emailed commentary, adding: “The most likely move forward is to scale out of positions partially and wait that the range is formed without a strong directional bias.”
