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Helium HNT: What's Going On?

This is a longer post than our usual content, but we encourage everyone to read through it when you have time, particularly those hosting a Helium Hotspot. It should shed some light on several hot topics surrounding Helium (HNT), the general crypto market, and predictions for the potential future value of HNT.

We have recently received a few enquiries regarding how much “money” individual hotspots are mining, and the figures given by our hosts are nearly always described to us in £ (pounds sterling) and not HNT (Helium). This is where it gets difficult to explain the differences between the value of mining and holding HNT, and the value of the HNT itself. Let’s be frank to start off with. The price of HNT has plummeted over the last 4 months, along with the rest of the crypto market. This drop in HNT value couldn't have come at a worse time, with the current instability in the Helium Network, mainly due to the rollout of the light hotspot update and subsequent ongoing fixes, which has led to rewards for hotspot owners to be far lower than anticipated in previous months.

Likewise, we cannot control how much HNT is produced by our network of miners. We can give them the best chance possible based on location, elevation, line-of-sight to other hotspots etc… but, as Proof-of-Coverage is still reliant on the Network Validators holding up their end of the process, as well as other hotspot owners, network administrators, network developers, and hotspot manufacturers, we are still at the mercy of others in this regard.

So, how are we still confident about our investment into the Helium Network and the crypto market in general? Well, with Bitcoin being the dominant cryptocurrency at the top of the charts, most other cryptocurrencies will follow the trends of Bitcoin, so let's delve a little deeper. It’s been a rocky start to the year for Bitcoin, but experts still say it will hit $100,000 — and that it’s more a matter of when, not if.

Bitcoin’s price fell below $21,000 today. A myriad of factors is contributing to growing economic anxiety including surging inflation, a shaky stock market, rising interest rates, and fears of a possible recession.

Investors are wrestling with concerns over rising inflation, geopolitical tensions, and the possibility of tighter monetary policy by the U.S. Federal Reserve. The crypto market has increasingly tracked the stock market in recent months, which makes it even more intertwined with global economic factors.

With no end in sight, the war, inflation, and shifting monetary policy in the U.S. will likely continue to drive more volatility in the coming weeks and months.

Amid the ups and downs, Bitcoin’s current price is a long way off from the latest all-time high it hit in November, when it went over $68,000. But even with the recent decline in price, Bitcoin is still more than twice as valuable as it was just a couple years ago. For Bitcoin, these kinds of ups and downs are nothing new.

Despite the volatility and recent slumping price, many experts still say Bitcoin is on its way to passing the $100,000 mark, though with varying opinions on exactly when that will happen.

The volatility is nothing new. Bitcoin has shown a steady rise in value over the years as any other cryptocurrency on the market. It’s only reasonable for Bitcoin investors to be curious about how high it can ultimately go.

Unfortunately, Bitcoin’s price is extremely difficult to predict and even more susceptible to market factors than more established asset classes.

It was easy to predict a $100,000 Bitcoin price late last year, coming off its latest all-time high in November. With Bitcoin’s big fall since then, the prediction game is even trickier.

The most extreme crypto sceptics say Bitcoin will tank to as low as $10,000 in 2022, but a middle ground might be to say the cryptocurrency can still climb to $100,000 like many experts predicted late last year, just on a slower timeline.

The rise of metaverse games, worlds, products, and experiences is increasing the popularity of altcoins, which has changed investors’ sentiments about Bitcoin, known as the original crypto.

Many experts are hesitant to predict a number and a date, but rather point to the trend of Bitcoin increasing its value over time.

Normal economic factors influence the price of cryptocurrency just like any other currency or investment - supply and demand, public sentiment, the news cycle, market events, scarcity, and more.

As a new and emerging asset, additional factors influence Bitcoin’s value more than the average currency or security.

Bitcoin adoption has been increasing at an annual rate of 113%. For perspective, people adopted the internet at a rate of 63%. If people warm up to Bitcoin at a comparable rate to that of the internet’s early days, there will be 1 billion users by 2024 and 4 billion users by 2030.

CoinDesk reported last month the number of new wallets worldwide increased 45% from January 2020 to January 2021, to an estimated 66 million. Popular crypto exchange Coinbase says it has now over 73 million worldwide users.

When China banned crypto in September 2021, investors saw the price of Bitcoin drop, though it has since risen and resumed its usual volatility. Even though there’s now about a decade of precedent for Bitcoin, the Securities and Exchange Commission is taking all decisions on a case-by-case basis.

Finally, another major influence on Bitcoin’s price is a cycle known as halving. It’s complicated and algorithmic in nature, but in essence halving is a step in the Bitcoin mining process that results in the reward for mining Bitcoin transactions getting cut in half. Halving influences the rate at which new coins enter circulation, which can impact the value of existing Bitcoin holdings.

As with any investment, financial planners and other experts advise against letting Bitcoin’s price fluctuations lead you to emotional decision making, and that a set-it-and-forget-it approach makes sense.

Since crypto is still new to most people, it’s OK to wait and see how things unfold. We only have about 10 years of data to inform crypto price predictions, and the value of Bitcoin, while potentially climbing long-term, is highly volatile from day to day.

As with Bitcoin, and most other major cryptocurrencies, the value of HNT will fluctuate day by day, month by month, and year by year. So, 1 HNT might only be worth $10 today, but it may be worth $100 in 3 months, or $300 dollars in 12 months. We are in this for the long-term and the future is predicted to be very rewarding for those that stay the course.

We appreciate our hosts continued patience and understanding during these unusual times. Just know, that we are all in this together.

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