The Price Plummet of FIL: A Misunderstood Gem or an Inevitable Bubble?
The sharp decline of FIL has indeed caught many off guard, after all, it only took a few years to drop from peak to trough. Once a star project, its price has fallen by 98%, even being mockingly referred to as a 'junk coin'.
We need to understand why FIL plummeted. The value logic of FIL for a long time revolved around mining economics rather than actual storage demand. In the early days, due to speculative hype among miners and heightened market sentiment, the price of FIL shot up quickly. Especially in 2021, a large influx of miners led to a surge in FIL demand, and the coin price once soared to $238. However, as market enthusiasm waned and staking demand decreased, the price of FIL began to decline steadily.
When miners realized that the mining returns of FIL were far below expectations, coupled with early investors continuously selling off, FIL fell into a 'bottomless abyss'. Additionally, FIL itself has a relatively high inflation rate, with a fast release speed that the market can't sustain, causing the price to naturally falter.
FIL also faces competitive challenges in the market. FIL's decentralized storage solution aims to replace traditional cloud storage services like AWS and Google Cloud. However, the reality is that the stability, pricing, and convenience of traditional cloud storage services far exceed those of the FIL network, making FIL's advantages not very apparent.
Moreover, FIL is actively pursuing technological upgrades, launching the FVM (Filecoin Virtual Machine) to attempt to transform FIL from a pure storage network into a smart contract platform.
How much can FIL rise in the future? No one can provide an accurate answer to this question as it depends on multiple factors. If Web3 storage experiences an explosion, FIL could indeed rise again, returning to the price range of several tens of dollars or even over a hundred dollars.
For those looking to invest in FIL, it is advised to view the risks rationally. First, one must clarify the investment logic of FIL; it is no longer just a mining coin but is gradually evolving into a decentralized storage ecosystem. If you agree with this direction, you might consider entering at lower prices.
However, if you are only looking to gamble short-term, FIL might not be the best choice. Secondly, it's crucial to manage your position well and not heavily bet based on momentary market sentiment.
FIL once dropped from $238 to $4, a decline that not all investors can bear.
