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The fear index for crypto has been flashing in red owing to a double-digit cut as high as 1/3rd of the value of the assets and Fed’s financial tapering. If you think that it was all, Russia’s recent crackdown on crypto further paints gloomy days ahead. Hence, if the charts show higher lows and lower highs for all the cryptos in continuous succession; it shouldn’t be surprising that a long crypto winter could be knocking at the door.
However, some of the cryptos lose almost 90% to even 100% of their value despite a strong use-case for the future, when such things happen, a trust deficit in the market becomes inevitable. Hence, it is necessary to unravel why such an incident is happening.
Is it the domino effect of the crypto market to blame or have there been other factors involved? In this article, we will look at the Bit Torrent project and why there was such a sharp fall in its prices. On top of this, we shall also look at the countermeasures that the ecosystem has adopted to mitigate the loss.
Why Some Cryptos are Losing Most of Their Value?
Bitcoin creates a domino effect for other cryptos; so once Bitcoin falls; other cryptocurrencies follow the trail. Hence, justifying why we are seeing a sharp fall in the crypto market. Most of the events have been influenced by the dollar strengthening against a basket of other currencies, assets, and even stocks. As a result, the selling pressure seems to be at its pinnacle and traders want to close their position with whatever they could manage.
However, some coins have fallen relatively higher than BTC like BitTorrent and that becomes a problem, and the rhetoric that cryptos need regulation may well pop out all over again. Let’s deep dive to know about BitTorrent, an unlucky mention in this category.
What is Bittorrent Crypto?
BitTorrent project is an extended version of the erstwhile BitTorrent software that allowed downloading files on a peer-to-peer basis from shared servers. However, over time, most of the files were either scraped away or they failed to stay on the server for long. So the need arose where everything can be done in a truly decentralized manner and downloading and file-sharing should reach the next level in terms of providing a gratifying experience to the users.
Hence the Tron foundation acquired the BitTorrent project and launched BTT token which would make downloading faster and ensure files stay on the server for a long time due to the incentives attached. A nice use-case since everyone wants to skip the hurdle of paying extravagantly to the OTT platforms or online libraries. Despite such a groundbreaking or innovative use-case, why the token has been biting the dust lately.
Why did the price of BTT fall recently?
BTT is the native token of the BitTorrent ecosystem. However, lately, the price of the token has been completely written off on certain exchanges. Much of the events have been attributable to almost unprecedented gains in the last few months. In July, the token appreciated by 400%. Despite such a sharp rise, investors do not have a very positive outlook for the token in the near future due to its limited use-cases.
Apart from providing ways where users can store the file and take profits or service charges whenever someone else uses the file, Bittorrent fails to provide anything new. As a result, despite the protocol upgrade happening recently, there were no positive sentiments among investors who hold this token. On the contrary, these investors had made up their minds to book profits and close their positions. Hence, it kind of justifies why the token has lost almost all its value on some aggregators.
What are Counter Measures adopted by the Ecosystem?
BitTorrent will adopt the redenomination measures to eliminate the pullback from the investors. While redenominating a currency or a token, the ecosystem/government recalibrates the currency or token and breaks the same into smaller fragments. In doing so, a new value establishes for the currency or token. BitTorrent has been redenominating with a 1:1000 ratio.
Meaning, for 1 BTT token, a total of 1,000 BTTC tokens will be minted. The ecosystem has taken the approach to accommodate the increasing influx of the clients in their ecosystem who would pitch into the ecosystem to cash in on new use cases like staking, farming, and liquidity mining. Using the token redenomination, the BitTorrent ecosystem will scale up the existing 990 billion tokens to 990 trillion making it more accommodative and fixing an unprecedented rise in the prices.
With that said, the ecosystem has asked wallets, exchanges, partners, and developers to swap to the BTTC token from BTT within 30 days of the mainnet launch which has happened on Dec 12, 2021.