Is Theta Fuel (TFUEL) A Good Investment?

Theta Fuel is one of the few cryptocurrencies that actually has a great use case. It is rewarded to users of the Theta Network simply for viewing videos and supporting the network of streamers/content creators. However, as a crypto investor, I’m more interested in whether or not Theta Fuel is a good investment.

Yes, Theta Fuel is a good investment because it has great fundamentals: The use-case is solid, good tokenomics, and the future potential for growth is high. Furthermore, the technical analysis is bullish with a risk/reward at over 1/8.

I’ve written about Theta Token and Theta Fuel in the past, and I think both are good investments. At least they have been in the past.

In this article, I’ll look at what the future holds for Theta Fuel and what prices might be realistic to expect it to hit.

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Fundamental Analysis Of Theta Fuel:

Let’s get a better understanding of what Theta Fuel is and what its function is. After all, you don’t want to invest in something that isn’t needed in the long term.

Theta Fuel is the token native to the Theta protocol. This means that the token is used to pay transaction fees and node operators for running the blockchain.

TFUEL is basically like ETH is for the Ethereum blockchain, and BAT for the brave browser.

To be more specific, this is how the system works:

Theta fuel system
source: thetatoken.org/

Nodes staking Theta Token receive Theta Fuel and sell it to exchanges. Then video platforms (The YouTube types) purchase Theta Fuel and use it for running their platform and reward viewers who share their spare bandwidth – Kind of like seeds from the days of piratebay, except you’re paid for it and it’s legal.

This “circle of life” we see on the image above gives you a clear view of what Theta Fuel is and why it exists.

Put simply:

Theta Fuel is used to run video platforms and simultaneously reward viewers who share their spare bandwidth to lower the costs of broadcasting for the video platform. This decentralized broadcasting network is an improved business model for the platforms, and it’s paying viewers to watch their videos.

I think we can all agree that being paid to watch videos that you will watch anyways is a fricking miracle. If you’re anything like me, you’re sacrificing countless hours of your time on YouTube.

Well, now you can monetize it!

Anyways, let’s get back to the analysis.

The Tokenomics Of Theta Fuel:

The Initial supply of Theta Fuel was 5 billion coins. That’s 5x the supply of Theta Token.

Contrary to Theta Token, the supply of Theta Fuel is not capped – it has no maximum supply.

The planned inflation rate is at 5%, which is negative in terms of price.

A 5% inflation rate will effectively decrease the price per token by 5% every year.

However, people lose access to their tokens from time to time, effectively taking them out of circulation.

For this reason, the inflation rate of Theta Fuel is probably closer to 3-4 percent per year, depending on how stupid people are.

I’m also interested in the distribution of this token. For instance, does the ten richesTFUEL holders control 70% of the supply?

After some digging, I found the largest stakers of TFUEL:

TFUEL stakers
Source: https://explorer.thetatoken.org

Combined, they stake roughly 160 million tokens. They own more tokens than they stake, so we’re adding 10% to the staked amount in our calculations.

In other words, the top five wallets hold 176 million Theta Fuel tokens combined.

The total supply is roughly 5 billion tokens, which means that the five riches wallets hold about 3.5% of all TFUELs in existence.

3.5% is little compared to coins like Dogecoin and Chainlink, where the top 10 wallets hold over 60% of the supply.

This is great news because it means that the tokens are well distributed, not giving any wallets control over the supply/demand of this token.

Think about it: If a guy owns 50% of the supply, he can manipulate the heck out of the price.

Another thing I love about the tokenomics of TFUEL is that over 40% of the supply is staked:

This effectively takes it out of circulation and makes the price more sensitive to increased demand. In other words, the price increases more when lots of people buy the token!

The tokenomics of Theta Fuel seems good. I wouldn’t say I like the inflation rate, but I understand that they need it to stimulate growth and adoption.

The Adoption Of Theta Fuel:

The adoption is probably the number one factor when analyzing a cryptocurrency project. Without adoption, I’m not even touching it (unless it’s a short-term trade based on hype).

Luckily, the adoption of TFUEL is connected with the adoption of the entire Theta network/ecosystem, which has a large degree of adoption:

Partnerships, Investors, and Stats:

Theta has a bunch of partnerships with big names like NASA and LIONSGATE. Check it out:

Theta Partners
source: https://www.thetatoken.org/

The fact that they’ve managed to get those guys on board means they are doing something big and that they have a lot of traction.

Also, they have big names like Samsung invested in the project:

Theta Investors
source: https://www.thetatoken.org/

This is also good news because influential investors = influential friends.

Think about it: If Samsung has a stake in Theta, they will 1) Help Theta succeed and 2) NOT work against them.

Let me also show you some stats about the activity on the Theta blockchain:

TFUEL Statistics
source: https://explorer.thetatoken.org/

The important stats here are that 41.36% of the supply is staked, there are 2.5 million wallets in total, and 20 thousand are active every day.

On the right, we see that the Theta blockchain handles roughly 30 thousand transactions every day for the past 14 days. This fluctuates over time, however.

To get a more concrete view of these numbers, let’s compare them to Ethereums stats:

Theta Blockchain Ethereum Blockchain
% of supply staked:41.36%5%
The total number of wallets:2.5 Million163 Million
Daily active wallets:20 000881 000
Transactions per day
(for the last 14 days)
30 0001 200 000
Source: bitinfocharts.com, ycharts.com, explorer.thetatoken.org

We see that Ethereum destroys Theta in this comparison, but that’s hardly a surprise. Ethereum is way beyond anyone else in everything related to adoption.

Nevertheless, Theta performs well and seems to have gained a fair bit of adoption. The partnerships and investors are really impressive. The fact that Samsung, NASA, and Lionsgate all thought, “Hey, this looks promising, let us join/invest with them!” is remarkable, to say the least.

The Team Behind Theta Fuel

I won’t spend a lot of time reviewing the team, but let me tell you: This team is really good!

The key players are all skilled and experienced. We’re talking PhDs, MBA’s, and multiple prior successful startups.

For instance, the CTO and co-founder, Jieyi Long, have a Ph.D. in Computer Engineering, developed multiple patented technologies, and Bachelors of Science (BS) in Microelectronics.

The CEO and co-founder, Mitch Liu, has co-founded Gameview Studios and Tapjoy, and a BS in Computer Science & Engineering from MIT. In addition, he has an MBA from Stanford Graduate School of Business.

It’s clear as day – These guys pack a punch!

Also, I have to mention this:

One of their advisors on the Theta team is Steve Chen, the co-founder and previous CTO of YouTube.

Having one of the key players in building YouTube help out Theta, who is competing with YouTube, is a huge advantage!

In total, there are 31 people on the team behind the Theta network, including advisors.

Does Theta Fuel have A Future?

If you’ve read through everything above, you should know the answer to this question:

Yes, Theta Fuel has a future. It’s the native token to the Theta blockchain, which itself is rising in adoption and usage – further securing the future of Theta Fuel. As long as people want to watch videos online, there is a market for this token.

However, let’s try to look at the future growth prospects for Theta Fuel and the Theta ecosystem in general:

How Much Can Theta Fuel Increase In The Future?

Let us assume that the price of Theta Fuel will increase parallel with the adoption of the Theta Network of decentralized broadcasters.

In 2020, YouTube had 2.3 Billion monthly active viewers. Let’s use this as a benchmark and try to do some good ol’ math.

At the time of writing, Theta has “millions of monthly active users” (source). Let’s make that a solid five million.

Alright, so Theta has five million users, while YouTube has 2.3 Billion. That’s 460x the number of users.

If Theta does 1/4 of the users YouTube has, that will result in 575 million monthly users, 115 times what they have right now.

However, Theta has the potential to go WAY beyond what YouTube is doing…

Theta is not only a YouTube-like platform – It’s also a Twitch-like, Netflix-like, and Microsoft Team-life platform.

In other words, the Theta platform has the potential to hijack users of YouTube, Twitch, Teams, Zoom, Netflix, HBO, Viaplay, Global News channels, etc.

They don’t even have to compete with them to get more users: If they convince, for example, Netflix to start using their platform for broadcasting (which is good for business), Theta gains millions of new users overnight, without Netflix losing anything – it’s a win-win situation!

What I’m trying to say is this:

Theta can grow to billions of users in the future either through creating new streaming/video platforms or by onboarding existing ones. The potential growth, in terms of price, for Theta Fuel is mind-bending.

Conclusion Of Fundamental Analysis Of TFUEL

The fundamentals of TFUEL are excellent: The use-case is solid, good tokenomics (except maybe for the inflation rate), the team behind it is great, and the future potential is crazy high.

I think this token will increase in value together with the growing user base of the Theta network, which itself seems to be growing at an accelerating rate.

All things considered, TFUEL is a good investment from a fundamental perspective.

However, the fundamentals are not everything. Let’s take a look at the technical side of things and read some charts!

Technical Analysis Of TFUEL:

When analyzing altcoins like TFUEL as investments, most people look at the USD value of the given coin.

However, we’re taking it a step further…

We’ll look at the BTC value of the token. After all, if the BTC value of the token doesn’t look bullish, you should put your money in Bitcoin instead.

Let me show you how the TFUEL / BTC Chart is looking:

TFUEL / BTC

Is Theta Fuel a good investment?
I’m using www.tradingview.com

The yellow horizontal lines are key levels of support/resistance. Using these, we can calculate a specific risk/reward ratio.

Worst case scenario for Theta Fuel:

We crash down to the lowest yellow line. I really don’t see us going any further down than that, given the solid fundamentals of this project.

This would represent a crash of 73% from the current price of 0.00000786 BTC per TFUEL down to 0.00000211BTC.

Best Case Scenario For Theta Fuel:

We spring back up near the previous ATH. Of course, we might go even higher, but let’s keep things conservative.

By doing this, Theta Fuel will be surging up by 122% relative to the Bitcoin price and hit 0.00001736BTC.

All technical things considered, I’m actually rather bullish on Theta Fuel.

However, if we fail to hold the support line we’re closing in on right now, things might turn bearish overnight.

Theta Fuel (TFUEL) Price Predictions:

Now that we have a target value measured in BTC, we can calculate it into USD and make some predictions:

I think Bitcoin is reaching $100 000 in 2021/2022.

We can use this to calculate the USD value of a certain BTC value.

The worst-case scenario of Theta Fuel: $0.211

Reaching a BTC price of 0.00000211BTC, which will be (at a $100K Bitcoin price) equal to $100 000 * 0.00000211 = 0.211

The best-case scenario of Theta Fuel: $1.736

Reaching a BTC price of 0.00001736BTC, which will be (at a $100K Bitcoin price) equal to $100 000 * 0.00001736 = $1.736

The Risk / Reward Ratio Of Theta Fuel:

If we look at the best and the worst realistic outcomes, as pointed out above, we can calculate a risk to reward ratio for investing in TFUEL.

We look at the current price, which you can check here (opens in a new tab), and how much there is to gain if the investment is successful, and how much you’ll lose if it fails.

The price at the time of writing is $0.3215. Every time you see that is used in the calculations below, you can change it with the current price at the time of reading.

The risk is calculated like this: Worst-case scenario divided by the current price.

Risk = $0.211 / $0.3215 = 0.66

The reward is calculated like this: Best-case scenario divided by the current price.

Reward = $1.736 / $0.3215 = 5.39

Finally, we have the risk / reward ratio:

Risk / Reward = 0.66 / 5.39 = 1 / 8.17

This means that for every dollar you’re risking, you might gain eight of them back if the trade is successful.

It’s important to remember that this tells you nothing about the probability of the trade turning out successful or not.

Technical analysis, in this case, only gives you an idea of what’s possible – what might happen.

I use it to get a clearer picture of the possible future prices of projects. Then, use fundamental analysis to figure out if it’s likely to move towards the upper parts of what’s within the realm of possibilities.

In this case, the fundamentals are solid, making it likely that TFUEL might reach the upper parts of the range of possibilities from $0.211 to $1.736.

For instance, Theta Fuel reaching one dollar is highly likely according to the combination of technical and fundamental analysis, as it’s in the upper-middle part of what the technicals predict, which the fundamentals are good enough to make happen.

If you want to learn technical analysis, read the article I’ve written on it (highly beginner-friendly).

Conclusion: Yes, Theta Fuel (TFUEL) Is A Good Investment

There are three reasons why Theta Fuel is a good investment:

  1. The Fundamentals are solid, with a good use-case.
  2. The technical analysis is bullish in terms of BTC value and USD value.
  3. The Risk / Reward is over 1 / 8, which is really high.

Please, keep in mind that this token is highly correlated to Bitcoin, which means that if Bitcoin declines, TFUEL probably follows.

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