Filecoin, Storj Tokens Outperform Bitcoin Amid Increased Use of Decentralized Storage Protocols

The utility FIL token jumped 62% over the past week. Decentralized storage protocols have recently gained attention as their use has increased, an analyst said.

AccessTimeIconFeb 21, 2023 at 11:04 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

The native tokens of shared storage protocols have soared over the past week, with an analyst attributing the surge to the platforms' increased usage.

Decentralized storage network Filecoin’s native utility FIL has been among the top performers, soaring from just above $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%, in the past seven days, respectively.

Filecoin price chart showed the cryptocurrency's price jump over the past week. (CoinDesk)
Filecoin price chart showed the cryptocurrency's price jump over the past week. (CoinDesk)

FIL’s jump comes as Filecoin readies its Filecoin Virtual Machine (FVM) for a March unveiling. The 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 lead 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 computing and storage networks, including cloud storage networks Storj (STORJ) and Siacoin (SC), have climbed 16% for the week. The CoinDesk Computing Index, which measures the market capitalization weighted performance of computing protocols, was up 16% over the past week.

“Competitive pricing, relative to Amazon Simple Storage Service (S3), makes decentralized storage an appealing choice for Web2 entities seeking cost-effective alternatives for storing large amounts of archival data,” Grigore said.

Elsewhere in markets

On Tuesday, BTC was recently trading at about $24,273, down 2.2%, while ETH was changing hands at $1,647, off 3.5%.

Crypto exchange Bitfinex's analysts said bitcoin’s recent rally to over $25,000 last week was driven by both “over-leveraged long positions” and "liquidating over-eager shorts.” Investors holding long positions believe an asset will increase in value, while those who hold short positions see an asset decreasing 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 falls liquidated around $179 million of their BTC short positions in the past seven days.

“Historically, this type of price action, where both the longs and shorts are wiped off simultaneously, has resulted in a range formation,” Bitfinex's analysts wrote in an emailed comment, adding: “The most probable move going forward is to scale out of positions partially and wait for the range to form without a strong directional bias.”

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jocelyn Yang

Jocelyn Yang is a markets reporter at CoinDesk. She is a recent graduate of Emerson College's journalism program.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.