BitTorrent (CCC:BTT-USD) is an ambitious effort to disrupt the online entertainment industry. BitTorrent on its official website states that “Based in San Francisco, BitTorrent is the company behind the largest decentralized P2P communications protocol for distributing data and large files over the Internet. The protocol is responsible for moving a significant percentage of the world’s Internet traffic each day.”
2021 has been a year with several cryptocurrencies gaining popularity and delivering massive gains to investors, traders, and speculators, a year of meme tokens, and the need for retail investors to generate massive gains at the least possible time.
This is the best-case scenario for any trader or investor. Can BitTorrent be a top choice as a crypto token to deliver massive gains in 2022? We do not have a crystal ball for this, so my arguments will start with a reference to my previous article on BitTorrent, “BitTorrent Is a Classic Example Of Why Crypto Isn’t For Everyone.”
In May 2021, I wrote that BTT token is cheap or too expensive depending on its fundamentals. I recognized it had plenty of utility as a way of downloading software and digital content in the form of movies and songs.
There was a reference to older times when the low speed of internet connections made downloading a movie seem like a century. On CoinMarketCap on May 27, 2021, BitTorrent token had a price of $0.004285 and was ranked number 43 in terms of market capitalization compared to other coins or tokens.
What has changed ever since, what remained the same for the BTT token?
BTT Token: History Repeats?
BTT token has witnessed a selloff from May 2021 to late July 2021 bringing its price to $0.0020 and a rally until September 2021 rising to $0.0049. As of Jan. 4, 2022, the BTT token has a price of $0.003004 and is ranked number 55 on CoinMarketCap.com in terms of market capitalization compared to other tokens.
In May 2021, it was ranked number 43 so there has been an evident loss of momentum for BitTorrent. Based on history, investors may expect rallies and selloffs to continue in 2022 for the BTT token. The question to ask is which party has the higher odds. This is a tough one, as price predictions are too hard for any crypto token.
Instead of betting on predictions to invest or not in BTT tokens, a better approach would be to analyze the underlying factors behind this peer-to-peer (P2P) protocol. Starting with the vision.
BitTorrent Positive Factors
First, BitTorrent has a bold vision. “BitTorrent’s original goal was to disrupt the legacy entertainment industry and how consumers obtain content.”
From a business perspective, this goal has a lot of value. I have referred to my article on BTT token in May 2021 about concerns related to legal and safe issues. The music industry relies heavily on intellectual property (IP) rights and losing revenue to BitTorrent’s distributed network is not a good idea.
BitTorrent has faced numerous legal battles in the past. I assume for being present with impressive numbers such as 200 million wallets, over two billion users, and 100 million monthly active users have found an effective way to handle all these legal disputes and troubles.
What makes any crypto token gain value other than tweets and endorsements by celebrities? What are the deeper factors that move crypto prices? Among top factors are utility, scalability, mass adoption, supply and demand, availability on exchanges, cost of production via for example mining, governance, and regulations. I would add media coverage also.
I argue that BitTorrent has plenty of utility as users can get faster downloads and receive BTT token rewards to get access to media content, music, or movies. Developers can get BTT token rewards using DLive, considered to be the largest live streaming community on the blockchain.
Receiving BTT token rewards for seeding sounds like an interesting idea. What about scalability? There are plans to improve the BitTorrent file system (BTFS) in 2022 such as “upgrading the decentralized validation mechanism” and “improving the stability of gateways and SDK.”
BTT Token: Questionable Factors
What makes me skeptical for BTT token is that mass adoption, a key driver that could make it surge has yet to be reflected on its price. There has been broader availability on exchanges and supply and demand seems to be elevated at least for Jan. 3, 2022, with a trading volume within the past 24-hour of 16.50%, according to CoinMarketCap.
On the negative side, the circulating supply of 990.000.000.000 BTT does not help to provide scarcity which would help raise BTT-USD price.
In the end, another question to ask is what the perceived value of the project is. I see plenty of value for sure. Would I engage in the economics of earning BTT token rewards for seeding? The answer depends on the time, amount received, and safety concerns. I would not like to get any viruses on my computer for this, even though I use a well-known antivirus system.
BitTorrent Bottom Line
BitTorrent would be on my list of crypto tokens if I was considering investing in the cryptocurrency market. I am not a fan of this market but from a myriad of tokens that have zero value, BitTorrent at least has utility and scalability. Looking only at its current price of $0.003004 — it may seem cheap. A quick look at its current market capitalization of $2,974,305,340.98 makes me at least dizzy.
On the date of publication, Stavros Georgiadis, CFA 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.
Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com/. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.