As the leader of distributed storage, the popularity and consensus are self-evident. Filecoin not only has a solid consensus but is also favored by major investment giants. But as the infrastructure of Web3, why is Filecoin's performance in the secondary market so mediocre?

Filecoin’s current market capitalization is about 11 billion, and its total market capitalization is more than 70 billion. Based on the market capitalization of 11 billion, FIL ranks 30th or below in the entire market.

Why does this phenomenon occur? In general, there are two reasons:

1. Market environment; 2. The development of Filecoin itself.

Let’s first talk about the current environment of the cryptocurrency market.

In 2020, the Bitcoin halving and the sudden outbreak of the epidemic caused extreme panic in the global capital market. The stock market and cryptocurrency market plummeted. Subsequently, in order to save the market, the Federal Reserve started printing money and carried out an unprecedented large-scale money printing. The currency circle, led by Uniswap, opened the prelude to the DeFi (decentralized finance) ecosystem. Subsequently, side chain technology, NFT, chain games, metaverse and other ecosystems took turns to perform, and the entire cryptocurrency market flourished. In this process, institutions and capital also played an important role: for example, Tesla purchased $1.5 billion in Bitcoin, Coinbase, the largest cryptocurrency exchange in the United States, went public, Grayscale Fund held cryptocurrencies worth tens of billions of dollars, El Salvador used Bitcoin as its legal currency, and new currency circle institutions represented by Three Arrows Capital and LUNA were like ducks in water.

That is to say, the last round of bull market had several driving factors: Bitcoin halving, supply reduction; global money flooding, capital flooding; cryptocurrency ecosystem explosion; and the promotion of institutional and capital entry. However, now, the next Bitcoin halving is in 2024, which is still two years away; on the capital side, due to the high inflation in the United States in 40 years, the Federal Reserve is also rapidly and substantially raising interest rates and shrinking its balance sheet, tightening funds; the cryptocurrency ecosystem, whether DeFi, NFT, chain games, or the metaverse, is in the process of de-bubbling, and no new large ecosystem has been seen that can lead the cryptocurrency to set sail; and institutions and capital are even more tragic. In May, LUNA was hunted by capital and turned to ashes, and then Three Arrows Capital went bankrupt and liquidated, triggering a major collapse of cryptocurrency institutions. Tesla's second quarter financial report also showed that it liquidated most of its Bitcoin. Therefore, the current cryptocurrency is still in a bear market. Although it has reached a relative bottom, it does not have the conditions for a sustained rebound and a big market.

Now let’s talk about Filecoin itself. The current Fil is in the process of de-bubble. Last year, when there were deficiencies in the ecological and other technical aspects, it was lifted to a high level by investors’ enthusiasm and the bullish trend of the overall environment. As a result, Fil fell heavily to the ground after the bubble burst.

According to the data from the block browser, the net circulation of FIL in the secondary market is about 500,000 per day. This is also easy to calculate. Today's circulation minus the previous circulation, divided by the number of days in between, we get this data. The main sources are output, linear release of institutional investors, and the release of the first batch of merchant pledged coins. At present, the application scenario of FIL is only pledge, and the daily consumption is even less than 100,000. The supply data of FIL may not change much until the output is halved and the release of institutional investors is completed. The supply seriously exceeds the demand.

Therefore, Filecoin can only hope for an explosion in the ecosystem. Filecoin's ecosystem includes programmable virtual machines, a search market, and large-scale effective data storage. The official plan is to launch the search market and programmable virtual machines by the end of the year.

After all, as the leader of distributed storage, Filecoin has such a huge number of underlying hardware and service providers, as well as a large number of developers and potential application ecosystems of blockchain networks. In no dimension is it inferior to other leading blockchain projects. Therefore, you don’t have to always stare at the K-line chart of FIL and get upset all day because it doesn’t rise. Before its ecosystem is truly implemented, it is likely to be a weak market that “goes with the flow”. When the virtual machine FVM and the retrieval market are implemented, the ecological applications can prosper and drive the demand for FIL.

I believe that the arrival of that day will not make everyone wait too long!!! #A9社区 ##BinanceTournament #feedfeverchallenge #BRC20