Internet Computer (CCC:ICP-USD) was one of the hottest cryptocurrencies in the past year, trading as high as $750 in May. It now trades at only a fraction of where it was in May, coming in at less than $50.
It has some exciting developments in the coming months, though, which could kick-start a recovery in price. However, ICP-USD remains a highly speculative investment with sizeable downside risk, limiting its long-term potential.
The ICP token has had arguably the wildest run for any cryptocurrency in recent memory. According to experts, its price skyrocketed early on, as it launched during a boisterous crypto market. However, as prices retreated across the industry, ICP-USD and other over-hyped projects lost most of their values.
Analysts have differing views about its long-term price potential, especially if it can become a NFT play. However, it’s best to have a short-term perspective about the asset to marginalize the risks at this stage.
What Is Internet Computer?
Dominic Williams, the president and chief scientist at the non-profit Dfinity, talked about Internet Computer at Davos last year. He describes it as a “public resource that will make it possible to build websites, enterprise IT systems, and internet services directly on the internet itself.”
Internet Computer appears to be built around the core principles driving the Web 3.0 phenomenon, including decentralization, permisonlessness, and trustlessness.
The key objectives of Internet Computer are to provide a cryptocurrency where IT complexities are reduced significantly and reliance on proprietary operating systems is reduced. Moreover, the goal is to provide a secure system, with security guaranteed by smart contracts. Dfinity states that the ICP crypto has reimagined how different components in the blockchain infrastructure communicate with each other.
The project is over five years in the making and is led by a team with a multitude of experience across various related fields, including fintech, security, IT and crypto. Moreover, the nonprofit organization has its research centers in Palo Alto, California, as well as San Francisco and Zurich.
It raised over $100 million in 2018 in a funding round led by Andreesen Horowitz and Polychain Capital. Polychain Capital is a top investment firm that is committed to investing in the crypto sector.
Cashing In On The NFT Craze
ICP-USD has also jumped on the NFT bandwagon by releasing 10,000 NFTs on its network for free. Its foray into the NFT world, called ICPunks, features a clown-based NFTs inspired by the Insane Clown Posse. The collection quickly sold out, helping the ICP token’s value climb higher.
After its success in the NFT space, Internet Computer plans to launch the ICPunks marketplace, enabling users to trade their collection using ICP tokens. Moreover, another small collection of free NFTs might be distributed among its supporters in the coming months. The true success of the project will become apparent once users exchange their clowns or sell them for profits.
Next year will bring in more exciting features for Internet Computer. ICPunks plans to work with cross-chain solutions to allow users to bring in their NFTs from other blockchain networks such as Ethereum (CCC:ETH-USD). The feature will drive up greater interest in crypto and give it the much-needed boost it needs.
Final Word On ICP-USD
ICP-USD is changing hands at a small fraction of its highs in May. It is one of the most volatile cryptocurrencies and among the worst performers in the past few months.
Its foray into the NFT space has some analysts excited about its future potential, but it’s tough to say whether it can help build its long-term case. Therefore, it’s best to invest in ICP for short-term gains only.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.