IOTA came crashing back down to earth on Thursday following an epic rally that took prices to record levels. The latest pullback has done very little to dissuade market participants about the coin’s long-term appeal.
The IOTA-dollar exchange rate plunged more than 20% to $3.47. The coin touched an intraday low of $3.20 before paring losses later in the session.
At present values, IOTA is capitalized at $10.6 billion, placing it fourth among active cryptocurrenices. Daily trade volume exceeded $1.3 billion, with the bulk of the turnover occurring on Bitfinex and Binance. Combined, the two exchanges accounted for nearly 60% of market activity.
Less than 24 hours ago, prices were seen at new record highs around $5.55 on news of a major agreement between IOTA and the likes of Microsoft and Fujistu.
One of IOTA’s claims to fame is its emergence as a major player in the market for Internet of Things (IOT). IOT is just as much a paradigm shift as it is a product or service, as it describes the new era of connectivity that is expected to sweep the globe. With tens of billions of connected devices, opportunity for monetization is expected to be plentiful. Although estimates vary, IOT is widely projected to be a multi-trillion-dollar phenomenon.
IOTA’s Data Marketplace has been created to decentralize global data flows to better leverage IOT. As IOT founder David Sønstebø recently highlighted, the growing reliance and penetration of data is creating a “machine economy” driven by interconnected devices.
Rather than go too far down the rabbit hole, investors should pay attention to the role of data in the new economy. How are businesses monetizing it and what sorts of tools are being used to derive value from it? This will quickly lead you to the domain of data analytics, which is a budding industry that intersects closely with IOT. It’s therefore no surprise that the likes of Microsoft and Samsung are joining IOTA’s pilot project.
Predicting the future of altcoins is notoriously difficult, and this is duly noted for IOTA. The cryptocurrency uses a new ledger technology that technically isn’t blockchain at all. Although this gives it unique features, it also makes the IOTA token more difficult to assess from an adoption standpoint. That being said, the platform’s integration with IOT serves a legitimate business purpose, leaving many analysts extremely bullish about the coin’s long-term prospects.
Perhaps the best gauge of IOTA’s long-term growth potential is the developer community itself. In general, developer activity is a good predictor of a cryptocurrency’s success over the long haul. The more activity surrounding a cryptocurrency, the higher its price. This fact was recently re-itereated by JP Vergne, professor at Ivey Business School in Ontario, Canada. As one might expect with the latest push into IOT, IOTA is generating a lot of buzz from the developer community. This should keep prices trekking higher for the foreseeable future.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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