The price of cryptocurrency IOTA, the token that represents the decentralized Internet of Things platform, is literally going through the roof. It was trading at $0.5 as November started. At the moment of writing IOTA is trading at $3.5. Is there more upside potential?
Before looking into this question it is worth looking into IOTA’s price chart:
The hard thing with this type of parabolic rise is to resist buying as it rises. There are two ways to look at this:
- As this is rising so fast it means there is incredibly demand so investors should not miss out.
- As this is rising so fast it is too late so let’s wait for a better entry.
While option (2) is the one that applies to all “normal” stocks, in cryptoland option (1) can also be valid.
When it comes to IOTA we believe both options should and can be applied simultaneously which makes crypto-investing different than traditional investing. Now that is only because the blockchain and crypto space is such a blue ocean.
This is fully in line with our 10 investment tips for cryptocurrencies investing.
What exactly is IOTA by the way? Very simple, this is what it is:
“The main innovation behind IOTA is the Tangle. It’s a novel new distributed ledger architecture that is based on a DAG (Directed Acyclic Graph). One might refer to it as a “Blockchain without Blocks and the Chain” (semantically, it’s not really a Blockchain).“
Sorry, that was the technical explanation, this is a more human version of what you can do with it:
“IOTA’s unique feature of feeless transactions enables a plethora of use cases that are not possible on any other platform. Not only do we enable true micropayments (send 1 cent, receive 1 cent), but we also improve existing and enable new data integrity use cases.”
So why is IOTA rising so fast? Presumably, although we did not find a real confirmation of our thesis, because they are getting traction. Several large companies are backing the newly set up IOTA Foundation.
Moreover, according to IOTA’s blog, IOTA has set up a Data Marketplace:
The IOTA Foundation is thrilled to introduce an ambitious project that has been in the making since 2015. The Data Marketplace is IOTA’s most comprehensive pilot study thus far. The goal is to enable a truly decentralized data marketplace to open up the data silos that currently keep data limited to the control of a few entities. Data is one of the most imperative ingredients in the machine economy and the connected world.
Companies like Accenture, Bosch, Fujitsu, Deutsche Telekom, and the likes, are participating in the Data Marketplace.
Is this a game changer? Potentially yes, and this could be the reason why IOTA is rising in a parabolic fashion. That said, there could be sufficient upside potential, even after a 5-fold rise.
To make things worse: IOTA is not available on many exchanges. Bitfinex is one of the few exchanges that offer IOTA. Scarcity fuels this situation.
IOTA is close to overtake Ripple as the 4th largest cryptocurrency in terms of market cap. Given the reaction on the Data Marketplace it could well be that this is about to become a game changing application, and would give IOTA real traction as a startup. In that case IOTA will go much higher … a phased entry seems the most wise thing to do.
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