Last May, not long after BitTorrent (CCC:BTT-USD) peaked in price, my take on the digital currency was that it would continue its “to the moon” move higher. Of course, that didn’t happen. Within a few weeks of writing that article, we saw the crypto market, BitTorrent included, crash.
Like other cryptocurrencies, BTT began to bounce back over the summer. Yet, unlike Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD), or even many of the more speculative tokens, this one failed to hit a new high. Instead, its brief partial recovery sputtered out well before the crypto market peaked again in early November.
Trading for $0.002429, down 82% from its all-time high, some may still be holding out hope for an eventual recovery. However, I wouldn’t count on one, especially in the near term. The market’s increasingly “risk-off” mindset suggests lower prices ahead for cryptocurrencies, from established down to speculative.
The long-term forecast for BTT is murky as well. Its “meme coin” days have come and gone. The token’s limited utility also limits its upside potential.
BitTorrent at a Glance
As you likely know, this crypto is an offshoot of the peer-to-peer (P2P) file-sharing protocol of the same name. But how did BitTorrent, a blast from the past site associated with online piracy, get into the crypto game?
It all started when crypto platform operator Tron bought the platform in June 2018. Besides the fact that BitTorrent had a big user base, Tron likely saw potential in 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 excitement surrounding the “cryptoization” of this file-sharing service. It likely had more to do with the speculative trading frenzy going on at the time, with traders trying to get into the next Dogecoin (CCC:DOGE-USD). This phenomenon was short-lived, and BitTorrent came crashing back to Earth during the May 2021 crypto meltdown.
Since then, this token has delivered middling performance. It made a brief rebound in August, only to struggle through the fall. Admittedly, after taking a big dive in early December, likely due to marketwide factors (more below), it shot up 42% on news of the pending launch of the new crypto-enabled BitTorrent network. However, this too proved to be a short-lived spike.
Upside is Questionable in the Short and Long Term
With news of the new network launch having minimal impact on the token’s price, it’s tough to be confident about BTT’s prospects.
In the near term, there’s a lot weighing on the cryptocurrency market. With the Federal Reserve growing more hawkish and set to raise interest rates in the coming months, risky assets are under pressure.
However, even assuming the crypto bear market we’re experiencing now doesn’t last long, I’m doubtful a comeback will happen for BitTorrent in the long term. Many, like my InvestorPlace colleague Muslim Farooque, argue this is due to BitTorrent’s limited use cases.
As Farooque points out, the BitTorrent Chain (BTTC) has its strengths. For instance, it is built on a proof-of-stake mechanism and has cross-chain capability with Ethereum. But given its limited utility outside of the BitTorrent platform, it’s not as if it’s going to take off like a more general cryptocurrency might.
You could argue that having the crypto component will promote usage of the platform, in turn increasing usage and the price of BTT. Still, unless there’s some indication BitTorrent’s user base is exploding due to the upgrade, I wouldn’t buy it for this reason.
The Bottom Line on BitTorrent
Last spring, BitTorrent was in the right place at the right time. The meme stock crowd stampeded into the crypto in full force, causing it to rocket higher on little more than hype. While there’s a long-shot possibility this could happen again, buying based on this seems more like wishful thinking than a well-developed bull case.
Given BitTorrent’s murky prospects and limited utility, it’s best to take a pass.
On the date of publication, Thomas Niel held LONG positions in Bitcoin and Ethereum. He did not hold any of the other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.