Daily market commentary from 16.10.2020

An overview of what is happening in the crypto markets, summarised daily by Crypto Finance AG Senior Trader Patrick Heusser in the market commentary.

Market commentary

Good Morning!

There has been some hype this week surrounding the long awaited launch of FIL$ (Filecoin).

Messari.io has a very slick summary of what it is:

Overview

Filecoin is a decentralized data storage network built by Protocol Labs that allows users to sell their excess storage on an open platform. It acts as the incentive and security layer for IPFS (InterPlanetary File System), a peer-to-peer network for storing and sharing data files. Filecoin turns IPFS’ storage system into an “algorithmic market,” where users pay storage providers in Filcoin’s native token, FIL, to store and distribute data on the network.

History

Filecoin is looking to provide an alternative to traditional online storage providers and protocols. Its technology acts as an incentive layer for the peer-to-peer file transfer system IPFS (InterPlanetary File System), which uses hash-addressed content structures to store data instead of centralized servers and IP addresses. This is intended to reduce redundancy, increase permanence, and improve efficiency.

How does Filecoin work?

Filecoin incentivizes IPFS by rewarding storage providers and retrievers for contributing resources to the system. The network also comes with built-in Ethereum integration allowing developers to access data on Ethereum’s blockchain and interact with its smart contracts.

Who is behind Filecoin?

Filecoin is being developed by Protocol Labs, a development firm founded in 2014 by Juan Benet. Benet and crew constructed Filecoin and IPFS in tandem, raising a few Seed equity rounds to fund the process. In 2017, the team hosted a token sale to secure funds for Filecoin’s development, which raised around $205 million in one of the largest token offerings at the time.

What is their vision?

Protocol Labs seeks to build a fundamental layer for data infrastructure that can be used by both blockchain and traditional providers, like Amazon Web Services (AWS) and Microsoft Azure. The project plans to achieve this goal by creating a marketplace in which any user who has storage capacity can connect to the network, creating a supply of unused storage both in consumer hardware as well as data centers of existing businesses. The Filecoin team believes this will reduce the price of storage in a way similar to how sharing economy companies like Airbnb reduced the price of short-term rentals in marketplaces traditionally dominated by large players with large capital requirements.

Where to trade Filecoin?

The coordinated launch on centralised exchanges showed massive interest from retail, which resulted in a large price range: from $10-$440 (the widest range on Binance).
Other exchanges such as Kraken showed a “mere” range of $50-$150.

Another odd price development is the Dec term future trading on FTX.com. Currently, it is trading at $22. Funnily enough, this is roughly the price Poloniex shows as a spot price (but they are the only exchange with such a low spot price).

Anyways, we might see some funny trading activities over the weekend for this coin.

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About the author

Patrick Heusser

Patrick Heusser is a Senior Trader at Crypto Broker AG. Prior to joining the company, Patrick worked as an Interest Rate Trader at UBS and held various positions in the IRCC (interest rate, commodity and foreign exchange trading) in London, New York, Singapore and Zurich. Patrick is an expert in trading and risk management. He also gained experience in other areas, such as building start-up companies. Patrick has a degree in banking from a business school. He has also taken various courses in technical chart analysis.