The month of March saw significant price gains in the native tokens of sharing-economy type of projects, especially so in the cloud storage and file sharing ones. Tokens like ANKR and STORJ made triple-digit percentage gains after Coinbase listed them, and the same thing happened to FIL and LPT tokens after Grayscale started offering trusts on them.
What is the fuss about these coins and why such huge gains in just 1 month?
The one thing these tokens have in common is that all are tokens of projects in the sharing economy, with ANKR and STORJ – decentralized cloud storage solutions, while FIL is a decentralized file-sharing platform and LPT is a decentralized video streaming platform.
These concepts are not new. They already have centralized predecessors in the form of Amazon Web Services (AWS), Youtube, Dropbox, etc. These projects are trying to become a more equitable version of their centralized counterparts. They aim to not be controlled, governed, or censored by anyone, unlike their respective predecessors who are controlled unilaterally by their respective company management. Users have no right whatsoever in the centralized version, while each user in the decentralized one can have rights through ownership of the respective tokens.
The fact that the concept is a familiar one, with the current centralized incarnations already having huge userbases, makes adoption on the decentralized ones easy. For instance, Youtube is the most viewed video content platform and cloud storage is already amongst the biggest industry in the world. It thus is easy to convince a common man on the street to simply move to “the better version”, rather than to try to educate and convince the commonfolk to accept new and abstract concepts that most blockchain projects are based upon, that most people have trouble understanding, much less adopt.
Most common folks are also aware of how much companies in the sharing-economy business have grown. Google, who owns Youtube, and Amazon, which is the front runner in the cloud storage arena, both have a market cap in excess of $1.5 trillion each. Granted, while Youtube and AWS do not contribute 100% to both company’s earnings, they do command a significant share of the business. Youtube’s advertising revenue was 11% of Google’s total revenue, while AWS accounted for 57% of Amazon’s total revenue last year. Hence, these projects have the benefit of having a precedent. One can use the value of listed entities like Google and Amazon as a guide to estimate the potential value of the decentralized version of Youtube and AWS. Thus, investors have visibility in such projects, which makes them more willing to invest, resulting in such projects gaining value sooner than other more abstract projects.
With Coinbase and Grayscale making these tokens more easily accessible to investors, more people will be able to invest in these projects, which is likely to drive their value up even more with time. Investors new to crypto may be more willing to invest since these projects have value propositions that they already understand.
With the realisation that the new Google and the new Amazon could be born out of these projects, investors are piling into these sharing-economy platform tokens. On the back of the increased demand, another sharing platform has gained lots of attention. BTT, the native token of the popular peer-to-peer file-sharing protocol BitTorrent, has steadily rallied 500% in March.
While the huge percentage increases over a short time period may seem excessive at first glance, the gains could be sustainable as these projects are still very undervalued compared with their centralized counterparts, even after the large price increases. The combined market cap of the 5 tokens mentioned above is only less than $20 billion, while the combined value of Amazon, Google and Dropbox is northwards of $3 trillion. Should these projects really take market share away from their centralized listed peers, investors could potentially generate 100x to 1000x returns from them, which means it is still not too late to get in if one is a mid to long-term investor.
About Kim Chua, PrimeXBT Market Analyst:
Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.
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