Crypto Storage Protocol Tokens Slide as Traders Short FileCoin and Storj

Short sellers were relentless on the tokens associated with storage protocols Filecoin FIL$1.0860 and STORJ$0.1073 over the weekend, with record shorts being placed FIL.

FIL is down 28% over the past five days, with STORJ down 20%. Both have underperformed ether ETH$2,351.45, which is down roughly 10% during the same time period.

Data from CoinGlass points to record liquidations on long positions for FIL and STORJ as last week came to a close.

Nearly $5.7 million long FIL positions were liquidated on Dec. 16, according to CoinGlass, while $365,000 in STORJ long positions were also liquidated. ICP$2.6979, a similar protocol, also had $500,000 in long positions liquidated.

Open Interest data from CoinAlyze suggests the worst is yet to come, with an 11% jump in open interest during the last 24 hours to about $52 million. Continued negative funding rates indicate that this money is coming in to short.

Traders might be questioning the utility of storage protocols, which have a massive – and growing – storage capacity but no obvious use case to utilize it.

Filecoin says it has a capacity of 15.34 exbibytes, or 17.6 million terabytes, but lists storage of OpenSea non-fungible tokens (NFT) as one of its primary clients, raising questions about how much of its storage network is truly utilized.

On OpenSea, monthly volume dropped to $159 million from around $4.8 billion at the start of the year, a decline of about 97% and nearly reflective of Filecoin’s decline from $236, when it listed on April 1, to $3 today.