What's Behind FIL's Recent Pump and Why It Hasn't Gained Price Appreciation: Exploring Filecoin's Supply and Development Landscape

    Filecoin (FIL) has seen a surprising rise in price lately, causing both holders and non-holders alike to take notice. However, a closer look at the overall chart reveals a different story. It's obvious that the coin has experienced significant fluctuations, with the chart resembling that of a scam coin.

    Despite this, there is much to be optimistic about. The recent introduction of the File Virtual Machine (FVM), scheduled for March 23rd, brings smart contract functionality to Filecoin. This is significant because it transforms Filecoin into an Ethereum-like Layer 1 blockchain with storage capabilities. For short-term traders, it may be wise to mark this date on the calendar and sell beforehand.

    Additionally, a series of short squeezes triggered an explosive rise in price, but it's important to note that the coin supply has prevented FIL from experiencing sustained growth. The distribution supply to the total supply is still only 19.81%, indicating that there is still plenty of room for a large amount to be dumped in large quantities.

source: https://observablehq.com/@starboard/chart-fil-protocol-circulating-supply

    As seen in the distribution chart, the supply of coins to the market is still increasing. The area under the black arrow shows two factors that cause deflation: the amount of filecoins used as fees and the amount staked. However, it's not being incinerated or staked at the rate of inflation, so coin inflation and selling pressure is inevitable.

source: https://dropstab.com/coins/filecoin/vesting

    Investment companies' supply lock-up ended in 2022, but the foundation's supply remains, with miners comprising 70% of the total volume. While this presents some challenges, there are positive factors for the price, including the fact that the amount of locked-up investment companies no longer exists, and staking and incineration are steadily increasing. If the volume of staking and incineration can withstand the volume of miners, we can expect to see a steady increase in prices.

source: https://tokenterminal.com/terminal/projects/filecoin

    Filecoin's steady development and the number of developers consistently hovering around 100 are encouraging signs for the future. Despite the challenges, it's clear that Filecoin is a coin with a trusted developer that has earned the backing of great investors. With the introduction of smart contracts, we look forward to seeing Filecoin continue to build and develop a larger ecosystem.

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