Can BitTorrent (CCC:BTT-USD) continue to “go to the moon?” So far, the token — an offshoot of the filing-sharing platform of the same name — has done just that. It still trades for less than 1 cent. But since February, it’s soared from around .04 cents (1/25th of a penny) to close to 1.25 cents, before pulling back to around .7 cents today. In other words, BitTorrent has produced a return of more than 17.5 times in a matter of months.
With all outstanding BitTorrent worth around $4.6 billion, CoinMarketCap is now the 35th most valuable cryptocurrency. And this may be only the start. Sure, this token is a bit more arcane than your “regular” cryptos like Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD). And for most investors, it may be too risky.
But if BitTorrent continues to gain critical mass, it could easily surge another three to ten times. However, because it’s a niche cryptocurrency, its popularity may fizzle out well before making it to the mainstream.
Yet for cryptocurrency aficionados looking for a long-shot opportunity, BitTorrent may be just the ticket. It’s already made parabolic moves, but its popularity may still be in the early stages.
Why Did BitTorrent Launch a Token?
As I mentioned above, this token is an offshoot of the BitTorrent peer-to-peer (P2P) file-sharing protocol. This decentralized file-sharing platform is most closely associated with content piracy, as “torrenting” has long been a method of downloading and sharing copyrighted material illegally.
So how did BitTorrent get involved in the blockchain/cryptocurrency space? As InvestorPlace columnist Mark Hake noted on April 26, it all started when Justin Sun’s Tron acquired BitTorrent’s parent company. Tron has built up an extensive blockchain ecosystem. In addition to facilitating Tron’s flagship token, Tronix (CCC:TRX-USD), the ecosystem is also utilized by other tokens.
In a nutshell, Tron launched BitTorrent on its network to incentivize file hosting. Using the token, the ecosystem’s users can compensate file hosts, both for maintaining the availability of their files and enabling faster downloading of them.
Yet, as shown by its initial breakout, BitTorrent has started to a take on a life of its own. Admittedly, predicting the gains of any cryptocurrency is impossible. After all, few were able to forecast that the “jokecoin,” Dogecoin (CCC:DOGE-USD), would become one of the most popular “altcoins” out there. Even so, the “story” behind BitTorrent may be enough to attract further interest from speculators.
Market Psychology May Be on the Side of BitTorrent
Cryptocurrency prices may have been volatile lately. But speculators are still chomping at the bit to find the next breakout coin or token. There are dozens of “altcoins” available for trading. What makes BitTorrent a likely candidate to become the “next Dogecoin?”
For starters, it helps that the token has a familiar name. An association with a file-sharing platform known for piracy in theory seems like bad optics. But the attention sparked by its controversial roots may help garner it further attention and more interest from speculators.
Secondly, the fact that it trades for less than a penny could help fuel the belief that it’s a “cheap” asset. That factor helped fuel Dogecoin’s epic rise so far this year. BitTorrent, however, is missing one key ingredient: support from celebrity billionaires. The tweets from Elon Musk and Mark Cuban about Dogecoin helped to fuel its mania. For BitTorrent to reach such heights, a famous name may need to tout it, too.
Will this happen? It’s possible, but that’s too hard to forecast. However, the two factors on BitTorrent’s side may be enough to boost its prices. Putting it simply, BitTorrent is a gamble on market psychology. But it may be the next cryptocurrency to attract a mad rush of speculators.
Be Cautious With This Cryptocurrency
BiTorrent isn’t a good cryptocurrency play for those dabbling in the space for the first time. If you want exposure to the continued disruption of “old school” finance by blockchain technology, you’re still better off focusing on established names like Bitcoin and Ethereum.
But if you’re a seasoned cryptocurrency speculator, BitTorrent may be a high-risk play worthy of rolling the dice on. BitTorrent could become the “next Dogecoin.” Or it could fizzle out and tumble. Yet it may end up being a long-shot that pays off. However, it’s best to trade it cautiously.
On the date of publication, Thomas Niel held long positions in Bitcoin and Ethereum. He did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.