Years ago, for a short time, I sold radar detectors to speed demons eager to evade the local constabulary while speeding to the family cottage in Ontario. While using a radar detector was forbidden in the province, the sale of them wasn’t. This reminds me of BitTorrent (CCC:BTT-USD) in the sense that torrenting isn’t illegal but pirating copyrighted material using BitTorrent is.
Honestly, except for my brief investigation of BitTorrent as a means for getting content for less — as a writer, I should have known better than even to consider this option — I have absolutely zero understanding of the BitTorrent that exists today. None.
So, I’ll have to lean on my colleagues to get up to speed. Hopefully, by the end of this article, you won’t think I’m a total boob.
Here goes.
BitTorrent Is an up-and-Coming Cryptocurrency
InvestorPlace’s Mark Hake recently called BitTorrent an “up-and-coming cryptocurrency.” Of course, in the same breath, he suggested its sketchy background in peer-to-peer file sharing made its crypto token an investment of last resort.
From his list of better options, I really like Cardano (CCC:ADA-USD) and Ethereum (CCC:ETH-USD), but I’m still early in my cryptocurrency education.
As for the article, my colleague mentions investors should read before forking over any cash to buy BitTorrent; he’s right on the money. A few short paragraphs in, and I’m hooked.
“Its genius [BitTorrent] came from being decentralized — spreading the burden of bandwidth, and liability, across a number of users instead of one company. The philosophy of decentralization shaped BitTorrent’s laissez-faire view of itself,” wrote The Verge contributor Chris Harland-Dunaway in September 2020.
“It supplied a technology and had no responsibility for the pirated content illegally distributed by it.”
Sounds a lot like my radar-detector-selling days of the past.
As if that’s not bad enough, Harland-Dunaway noted that BitTorrent’s new owner, Justin Sun, published an autobiography Brave New World in 2017 at the ripe old age of 27. He’ll be 31 in July.
Warren Buffett was worth $9.3 million adjusted for inflation when he was 30. I doubt he would have felt the need to write an autobiography at that age. Heck, he only authorized the first biography about his life in 2008.
More than anything, Sun’s overconfidence should make crypto investors very leery.
BitTorrent Should Fly Higher in 2021
InvestorPlace contributor, Muslim Farooque, believes BitTorrent should continue its bullish run over the remaining eight months of 2021.
It’s hard to take something seriously when it trades for $0.006985. Yet if you bought the altcoin at the beginning of 2021, you’re up 2,328% through Apr. 29. A $10,000 investment is worth almost $243,000. That’s some serious coin.
My colleague points out that predictions about its future price include $1 by the end of 2021 and $3 by 2022. If it hits $3, a $10,000 bet becomes $4.3 million in 20 months or less.
Staggering.
Unless I’m missing something, the entire premise for BitTorrent appreciating by almost 4,000% on an annualized basis has to do with the fact it is limited to 990 billion tokens, in much the same way Bitcoin (CCC:BTC-USD) is limited to 21 million Bitcoins.
Other than that, I’m having a tough time understanding the value of BitTorrent.
The Bottom Line
Before Justin Sun came along, BitTorrent gained a reputation by disrupting peer-to-peer file sharing. That’s why it was able to sell to the Tron Foundation in 2018 for $140 million.
Today, the company says BitTorrent and µTorrent have more than 100 million active monthly users. That’s real value.
However, as InvestorPlace’s Josh Enomoto said recently, it’s unlikely that BitTorrent will ultimately be able to separate itself from Bitcoin’s market dynamics, which means you might as well buy Bitcoin.
As decentralized finance (DeFi) continues to gain traction, it will be interesting to see how BitTorrent can pivot in that direction. In an August 2020 Q&A hosted by BitTorrent, Justin Sun had a lot to say about the BTT token.
“It’s safe to say that BTT token enriches the BitTorrent ecosystem by bringing more users and developers into the blockchain world. Now, over 1 billion users across the globe have access to the digital economy established by blockchain technology, and this is exactly why we built the BTT empire in the first place,” Sun said on Aug. 16, 2020.
“I believe that BTT will remain strong and vigorous with the help of TRON ecosystem, and BTT holders will in return receive substantial rewards.”
One thing stands out in those comments that suggest Sun is a wolf in sheep’s clothing. Any guesses?
Sun uses the proverbial “we” to describe why the BTT empire was built in the first place. He overlooks the fact that BitTorrent was started in 2004 and existed for 14 years without Justin Sun’s grand vision for the company.
At first blush, I’m really not impressed with BitTorrent as a token, cryptocurrency, or whatever you want to call it. Perhaps someone will alter my opinion in the future.
For now, I can’t possibly recommend it.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.
