Traders valued the Internet Computer (ICP) at $630 during its debut on Coinbase on May 10. However, the dollar bids for this token exploded to reach highs of $3,093 on Binance as of May 11. In the meantime, HitBTC reported ICP at a peak of around $407.
This huge difference in ICP rates across multiple cryptocurrency exchanges was as high as $2,500 at some point. Moreover, the difference represents a berserk trading sentiment in the Internet Computer market. It has landed ICP in the list of the top ten cryptos by market cap, surpassing even some veterans like Cardano (ADA), Dogecoin (DOGE), and XRP.
At some point, it reached as high as the fourth spot.
Massive price corrections followed on profit-taking sentiment. Entering the Wednesday trading session, the ICP/USD exchange rate on Binance and Coinbase was around $338. On HitBTC it reached $14 higher. The downside movement prompted ICP to drop in crypto ranks to settle at the eighth spot currently.
Why Did ICP Rally?
The instant arrival of ICP among the top-ranking cryptos caught many crypto traders and analysts by surprise. A quick look into the token’s issuing authority, Internet Computer, described it as a “blockchain-based cloud computing project” that projects to build an open, public network.
But the largest takeaway for the traders was the involvement of high-profile institutional players in the projects.it included the US-based angel investor Andreessen Horowitz. Horowitz is known for backing Twitter at its early development stage and a crypto-focused hedge fund in New York helmed by Olaf Carlson-Wee, Polychain Capital. He earlier served as the head of risk at Coinbase.
In the meantime, the ICP token gained listing on top crypto exchanges right after its launch last Friday. It reflected a carefully structured strategy by the Zurich-based nonprofit backing Internet Computer, Dfinity. It landed ICP tokens right into the conscience of the retail and daily traders.
— Fatah Kasmaran ∞ (@fatahkas) May 10, 2021
What Is Internet Protocol?
Retrospectively, Dfinity strives to create a blockchain-based infrastructure, one in which the internet itself supports lots of software applications instead of the cloud hosting providers. Its Internet Computer protocol reportedly proposes to host online services, like messaging, storage, social media, search, and peer-to-peer digital interactions, atop its public Web3.0 cloud-like computing protocol.
The aim involves relying more on large data centers and the high-end node machines, validators, with the capacity much bigger than that offered by the leading blockchain Ethereum.
In general, Dfinity hopes that it will provide the first real global blockchain network that operates at the top web speed with unlimited scaling features which support any volume of smart contracts computation. One researcher at crypto analytics platform Messari, Mira Christanto, noted:
“If the IC succeeds at replacing legacy IT, there would be no need for centralized DNS services, anti-virus, firewalls, database systems, cloud services, and VPNs either.”
Dfinity has proposed decentralization by introducing a unique consensus model which is known as Threshold Relay, enhanced with its Blockchain Nervous System to guarantee algorithmic governance.
In the meantime, ICP serves as a native asset to the Internet Computer. Its key role within the platform comprises of staking that enables users to participate in the Blockchain Nervous System together with security deposits that enable private entities like client software and cloud networks, to link to the Internet Computer’s public network.
Growth Prospects For ICP
Previously, Dfinity raised $163 million through private funding rounds. Meanwhile, the nonprofit organization also got $4.1 million in Ether (ETH) and Bitcoin (BTC) in February 2017.
In May 2018, the firm airdropped up to $35 million worth of ICP tokens, which were formerly known as DFN, among its early supporters. It marked 0.8% of the initial ICP supply. Those who participated in the airdrop got the IOU versions of their ICP holdings in September 2021.
They were allowed to transfer the coins back to ICP on May 10, a day before the token’s debut on Coinbase.
Dfinity seeks to expand its network of data centers and developers. Currently, the nonprofit is running up to seven subnets with 68 nodes across 12 independent data centers. The goal is to have reached up to 123 data centers hosting 4,300 nodes by the end of this year.
Just like Ethereum and Bitcoin, the prospects of infrastructural growth in the Internet Computer ecosystem may enable the speculators to raise their long-term bids on the ICP-enabled pairs. It would get a further boost as the investors continue looking for protection against their fears of macroeconomic inflation.