Internet Computer (ICP) Sees Stellar Market Cap Entry Sour As Sentiment Turns Bearish

Belgium (CoinChapter.com) — The cryptocurrency industry is home to many innovative projects. Every so often, a completely new venture will launch and quickly climb the market cap rankings. Internet Computer ((ICP) is such an example, even though some things are cautious.

What Is The Internet Computer?

As a public network allegedly capable of providing scalability on par with the speed of the internet, Internet Computer has high expectations to live up to. With a strong focus on smart contracts and reducing computing costs, the team behind this project is confident they can attract developers globally. Additionally, they claim the network can suit many use cases, including DeFi, social media, DApps, and much more.

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This blockchain network is developed by the DFINITY Foundation and will extend the functionality of the public internet to build a public computing platform. It is a very bold vision that may not prove easy to fulfill. While it is true that DeFi and DApps suffer from a lack of scaling, finding a solution is never easy. A network on this scale is only as strong as the number of nodes distributing the workload.

Although the team claims it is supported by 48 independent data centers across different continents, and 1,300 nodes distribute the workload, that is not the case today. The network’s statistics indicate 16 data centers are currently operating, with 89 active nodes in total. A  far cry from the projected numbers that seem convinced so many investors to buy the ICP token as soon as it hit the market. 

ICP Price Action Sours Quickly

Even though the Internet Computer token – ICP – has been listed on all major exchanges quickly, it is not sufficient to keep the price momentum in place. As expected, the token started at a very high value and is now gradually losing ground. The all-time high of $700.65 – per CoinGecko – did not last long, as the current price is roughly half that.

The speculative nature of cryptocurrency markets will create an uphill battle for ICP. Although many people will expect the price to rebound from here, no guarantee will happen. One rebound took place already to take the price from $275 back to $480. Even that momentum stalled rather quickly. The markets are very volatile by nature, and ICP will likely suffer from it for some time to come.

Some Conflicting Internet Computer Information

When a new project comes to market, data aggregators will often scramble to list all available details on their platform. Unfortunately, it seems the DFINITY Foundation isn’t even sure about the current circulating supply for Internet Computer. While they claim there are over 125 million ICP in circulation, Coinmarketcap states 123.747 million, and CoinGecko lists no circulating supply until the numbers add up. An interesting albeit potentially problematic scenario for investors and speculators to keep an eye on. 

New research profile from @BinanceResearch:
The #InternetComputer is a layer-1 protocol to become a blockchain network that evolves the internet. As of May 10 2021, total supply of ICP is 469,213,710 and current circulating supply is 125,067,597 (～26.65%) https://t.co/IgZXOuNMeZ

— DFINITY Foundation (@dfinity) May 11, 2021

Even though it is understandable why people are excited about the Internet Computer and the potential it holds, the current ecosystem is less competitive than people may assume. More specifically, there do not appear to be any applications running on this layer at the time. That is, except for the Network Nervous System, which is still in beta. Although more applications will come to this ecosystem eventually, it may take a while until developers can unlock its potential.

Closing Thoughts

As is often the case when a new crypto project launches, speculation will drive the price rather than technical capabilities. If the DFINITY Foundation can deliver on its promises, Internet Computer will be a force to reckon with. That may not be the case in its current form, however. It is still early to draw any real conclusions, as the project is still in an early stage. More work needs to be done regarding nodes, data centers, and applications.

Regarding the value of the ICP token, there are some lingering questions as well. The price spike to $700 in quick succession raises many eyebrows, and the subsequent price “crash” is normal.

However, the circulating supply matter will need to be resolved with some transparency sooner rather than later. Finding the “correct value” for this token will also hinge on how the developers roll out the network. Speculation can only do so much in this industry, after all.