According to the latest reports, the market capitalization of Filecoin (FIL) has reached $450 billion. Filecoin (FIL) exists as a cryptocurrency and digital payment system. This system is based on the IPFS network that is known as InterPlanetary File System.
Filecoin (FIL) is known for providing a unique and very convenient solution to space usage for users. The primary functionality of the FIL platform is that it lets the users simply rent out the unused space they have on their hard drives. The users can provide the same facility for the retrieval of the data.
The mechanism offered by FIL works almost the same as Snowflake that has been following its model for a long time. Snowflakes had reportedly carried out a software IPO back in September 2020 that is considered to be the largest in history.
Just recently, there has been a huge surge in the price, adoption, and market capitalization of Filecoin (FIL). The analysts and on-chain data analyzing firms have been closely monitoring the performance of Filecoin (FIL).
These analysts have speculated that there might be three major factors that may have resulted in FIL experiencing such a high rally.
The three major factors behind its growth could be its uniqueness as compared to Ethereum (ETH), rise in demand from China, and its technical momentum.
According to one of the Ethereum (ETH) analysts, James Spediacci, Filecoin is the only protocol that has managed to take Ethereum (ETH) head-on for the past four years.
There were many protocols and solutions introduced to compete with ETH but none stood a chance. However, FIL has managed to do just that and the major factor behind its success versus ETH is its uniqueness as a layer one blockchain.
He stated that FIL has been very innovative when it comes to integrating IPFS with decentralized cloud storage.
When it comes to FIL demand for China, a Chinese crypto-journalist known as Wu Blockchain has shared some interesting information. According to the journalist, the demand for FIL has been constantly increasing in China.
According to figures, the largest cryptocurrency exchange in China “Huobi” shows that the daily trade volume for FIL alone has reached $24 billion.
As per analysts, the main reason behind its demand in China could be the FOMO mechanism. As Asia is becoming one of the fastest-rising regions in terms of cryptocurrencies, the crypto-users in the region are adopting FIL with FOMO.
When it comes to technical momentum, FIL has been gaining rapid growth with respect to its open interests. According to one of the on-chain data analyzing firms, Filecoin has experienced a 46.37% increase with respect to its open interest.