Holo Crypto Needs to Match Ethereum’s Growth to Live Up to Its Potential

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Holo (CCC:HOT-USD) has done quite well this year, despite falling significantly off of its April 4 peak of 2.848 cents. On June 3, it was at 0.8854 cents. That means Holo has fallen 68.9% from its peak. Some believe that Holo crypto will rebound this year and approach its former peak, but I am skeptical.

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The crypto ended last year at 0.06403 cents, according to Coinmarketcap.com. In June, it was at 0.8854 cents per HOT token. That means its price is now 13.8 times its price at the end of 2020, a gain of 1,283% year to date.

So here we have a crypto asset that has proven its ability to rise quite significantly year-to-date. But it’s well off its peak price, implying that a rebound could be profitable. For example, if Holo crypto were to rise back to its peak of 2.848 cents, it could see a potential gain of 222%.

However, Holo still has a market capitalization of $1.574 billion. This ranks it as 63rd in the Coinmarketcap universe of cryptocurrencies. At yesterday’s price of 0.8854 cents, HOT is over 59 times its initial coin offering of 0.015 cents in 2018, when Holo raised $20.65 million.

Holo is not a top-10 crypto, but it is not insignificant, either. Let’s look at its prospects more closely.

Holo’s Standout Features

Holo is an Ethereum (CCC:ETH-USD) based blockchain protocol that is a distributed peer-to-peer hosting platform for Holochain apps (hApps.) These apps can be downloaded on personal computers to earn HOT tokens.

Holochain makes a big deal about the user autonomy built directly into its architecture and protocols. That is the key to its claim of a “distributed” network as a data platform.

Holochain bills itself as an easy platform to build apps. Here is what the company said in 2019 on Medium:

” …most activities people currently do on the web are possible to build on Holochain. It’s fast enough and scalable enough to run the likes of Facebook, Twitter, LinkedIn, Wikipedia, Reddit, and so on. In order for these kinds of apps to be valuable, though, they need to be accessible to everyone, not just users running Holochain software. That’s where Holo’s hosting system comes in.”

In other words, Holochain’s platform is easy to build on with hApps similar to existing Internet apps. Obviously, the key difference is that they are “distributed” applications — not controlled by any one company, but by the hApps’ users and developers.

Holo plans to disrupt the crypto app space. The company claims its peer-to-peer distribution of the blockchain can avoid scalability issues that existing platforms face. By parceling blockchain ledgers out to many different people, Holo can avoid congestion in both blockchain processing and storage.

As Coingecko points out, every device on a network is capable of functioning independently. Data synchronization is only required when necessary or agreed upon by users.

What To Do With Holo Crypto

Let’s get practical. There do not seem to be many Holochain apps. Github lists a number of them. The most recent one seems to be Holochat.

Moreover, the number of Holo addresses is low. According to Glassnode.com, there are only 1,876 active Holo addresses as of May 3. That is nothing compared to the 671,710 addresses Ethereum had as of the same date. In other words, Ethereum has 358 times the number of Holochain addresses.

On the other hand, consider this: Ethereum has a market value of $315.5 billion. That is 200 times Holochain’s market cap of $1.57 billion. But given the 358 times address differential, one would expect the market cap to be roughly that size. This might imply that Holo is a bit overvalued now.

That is a static way of looking at the differential. If Holo’s address creation growth rate is higher than Ethereum’s, then the price differential might be explained. Right now I cannot determine the exact rate, but I suspect that Ethereum’s is much higher than Holochain’s.

So for the time being, I believe that Holo crypto is fairly valued. Carefully monitor the address rate differential. If a hApp takes off and the rate is strong, one could invest in the crypto sometime before the end of the year.

On the date of publication, Mark R. Hake held a long position in Ethereum (ETH-USD). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.