The decentralized storage network’s FIL token jumped 19.4 percent today, outperforming most major crypto assets like Bitcoin and Ethereum. Several other tokens, including Polkadot’s DOT and Kusama’s KSM, have also advanced, though Filecoin is the top performer today in the top 100 cryptocurrencies. According to CoinGecko data, it is currently trading at $9.90, up 75 percent over the past week.
The rise comes during a period of significant volatility in the crypto-currency market. Prices have trended lower for months amid macroeconomic stress, market exhaustion and the collapse of giants like Terra and Three Arrows Capital, but the market began to show signs of recovery in July. Last week, the Federal Reserve raised interest rates by another 75 basis points, while the Bureau of Economic Analysis revealed that the U.S. economy shrank for a second consecutive quarter, signaling the beginning of a “technical recession“. While such developments would generally be seen as negative for risk assets, the crypto currency market soared last week, suggesting that the market may have actually priced in macroeconomic uncertainty.
Crypto-currency market rebounds
Bitcoin closed July in the green after a negative May and June, posting its best monthly performance since October 2021. Meanwhile, Ethereum has been leading the market in recent weeks amid growing anticipation of its milestone “Merge” event, tentatively scheduled to go live in mid-September. When Bitcoin and Ethereum rise, liquidity tends to flow to other crypto-assets with smaller market caps, which is part of what has allowed Filecoin to rally as confidence returns.
Interestingly, some of the best performing assets have been those related to the so-called “Merge trade” of Ethereum. Ethereum Classic’s ETC, for example, has jumped 44.4% over the past week, likely because the narrative surrounding its Proof-of-Work consensus mechanism has strengthened (the Ethereum fork will continue to use Proof-of-Work after its more famous sibling turned to Proof-of-Stake), leading soon-to-be redundant Ethereum miners to flock to the network. LDO, the governance token for the Lido liquid staking protocol, is up 31.3 percent over the same period.