Helium Network (HNT) Is Passing A Half-Million Hotspots, Investors Bullish

February 19, 2022 4:27 pm Comments

The Helium Network is a decentralized network for long-range hotspots and has recently reached a new milestone of around half a million miners.

Investors are expecting that number to double to around 1 million within two years which will create a bullish outlook for the price of the network’s native token HNT.

So far, Helium’s HNT token has been trading around $20-$40 since the beginning of the year and has declined quite significantly from its recent all-time high 3 months ago.

Based on the decentralized wireless market, Sean Farrell, vice president of digital asset strategy at Fundstrat Global Advisors, believes that the network could grow much quicker than anyone expects if Helium is able to take market share from traditional wireless carriers in the next few years.

CoinDesk reports:

Now, some crypto-market analysts are asking if Helium’s HNT token is poised to rise in value – and what the risks might be.

Helium uses a “burn-and-mint equilibrium” token model, with two units of exchange: HNT and Data Credits (DC). Users wanting to use the network to transfer data use DC, which is set at a fixed rate of $0.00001 per 24 bytes of data. When DC is acquired, HNT is burned — reducing the supply of HNT.

So that’s what might drive appreciation in the price of HNT: Greater usage of the network would theoretically make the tokens scarcer, and thus more valuable.

Looking at the current wireless market, Farrell expects the value of holding tokens in the Helium network to be valued higher than equity in a wireless carrier.

He compares Helium with T-Mobile, which currently has the largest existing 5G network and a market capitalization north of $150 billion. Helium currently has a market cap of $2.9 billion.

One of the major advantages of Helium over traditional networks is the decentralization of hardware costs.

The decentralized nature of the Helium network would allow the creation of networks in areas that are typically not profitable which means that there is tremendous room for growth for the Helium network and thus its native token HNT.

The only thing that investors of HNT are worried about is whether regulatory oversight from the government will stop the network from taking market share from traditional wireless networks like T-mobile.

There is always the possibility that the SEC might declare HNT as a security so current HNT holders are wary of the potential risks.

Ultimately, the company has stated that HNT is meant to be used as a incentive based utility service to connect sensors to the internet.

The Helium Network has recently raised capital from a round of high profile investors.

CoinDesk reports:

Decentralized telecommunications network Helium has raised $200 million in a Series D funding round at a $1.2 billion valuation, Axios reported Friday.

Tiger Global and FTX Ventures are among the new investors, according to Axios. Existing investors include Khosla Ventures, GV, Multicoin Capital, Munich Re Ventures and FirstMark Capital, Axios added.
In August, venture capital firm Andreessen Horowitz (a16z) led a $111 million token sale for Helium’s HNT.
Owners of Helium hotspots, which connect nearby internet of things devices, are rewarded with HNT, receiving more tokens the more their hotspot is used.
Helium’s HNT token is up about 1.5% over the last hour to $25.53 , according to CoinGecko.
At the time of writing, Helium’s native token HNT has a total market capitalization of #3 billion and is currently ranked as the 46th largest coin.

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