BitTorrent: Murky Prospects Make a Comeback Unlikely

Last May, not long Bit torrent (CCC:BTT-USDPeaked in price, my opinion of the digital currency was that it would continue to rise “to the moon.” Of course, this did not happen. Within a few weeks of writing this article, we saw the crypto market, including BitTorrent, crash.

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Like other cryptocurrencies, BTT started rebounding over the summer. After, unlike Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD), or even several speculative coins, this coin failed to reach a new high. Instead, its short partial recovery faded before the cryptocurrency market peaked again in early November.

It traded at $0.002429, down 82% from its all-time high, and some may still hope for an eventual recovery. However, I wouldn’t count on anyone, especially in the near term. The market’s increasing “risk off” mentality points to lower future prices for cryptocurrencies, from fixed assets to speculation.

The long-term outlook for BTT is also vague. Its meme coin days have come and gone. The limited utility of the token also limits its upside potential.

Quick overview of BitTorrent

As you probably know, this encryption is an offshoot of the peer-to-peer (P2P) file sharing protocol of the same name. But how did BitTorrent, a blast from the former site linked to online hacking, get into the crypto game?

It all started when the crypto platform operator started you can see It bought the platform in June 2018. Besides the fact that BitTorrent has a large user base, Tron will likely see the possibility of adding a blockchain-based incentive component to the site as a great way to monetize it.

However, I wouldn’t say its wild moves last spring were due to the excitement surrounding “encryption” for this file-sharing service. It probably has something to do with the speculative frenzy that was happening at the time, as traders were trying to get into the next phase Dogecoin (CCC:DOGE-USD). This phenomenon was short-lived, and BitTorrent returned to Earth during the cryptocurrency crash of May 2021.

Since then, this code has delivered mediocre performance. It made a brief recovery in August, only to struggle through the fall. Admittedly, after doing a major plunge in early December, likely due to market-wide factors (more below), it surged 42% after news of the pending launch of the new crypto-enabled network BitTorrent. However, this spike has proven to be short-lived.

The upside is questionable in the short and long term

As the news of the new network launch has little impact on the price of the token, it is difficult to be confident about BTT’s prospects.

In the near term, there is a lot of burden on the cryptocurrency market. With the Federal Reserve becoming increasingly hawkish and ready to raise interest rates in the coming months, risky assets are under pressure.

However, even assuming that the crypto bear market we are witnessing now does not last long, I doubt BitTorrent will make a long-term comeback. much like my Investor Fellow Muslim Farooq, argues that this is due to BitTorrent’s limited use cases.

As Farooque points out, the BitTorrent (BTTC) chain has its strengths. For example, it is built on the Proof of Stake mechanism and has cross-chain capability with Ethereum. But given its limited usefulness outside of the BitTorrent platform, it’s not as if it will take off like a more generic cryptocurrency.

You can say that having the crypto component will boost the usage of the platform, thus increasing the usage and price of BTT. However, unless there are some indications that the BitTorrent user base is exploding due to the upgrade, I wouldn’t buy it for that reason.

Conclusion on BitTorrent

Last spring, BitTorrent was in the right place at the right time. The cryptocurrency stock meme mob has been sealed in full force, causing it to surge to a level just above the hype. While there is a far-reaching possibility that this could happen again, buying based on this sounds more like wishful thinking than a well-developed bull case.

Given the vague outlook and limited usefulness of BitTorrent, it’s best to take a pass.

Posted by Thomas Neal He held long positions in Bitcoin and Ethereum. He did not have any of the other securities mentioned in this article. The opinions expressed in this article are those of the author, and are subject to InvestorPlace.com Posting Guidelines.

InvestorPlace.com contributor Thomas Neale has written individual stock analysis for web publications since 2016.