Elastic (XEL) is attracting a lot of attention in the cryptocurrency space right now. The token is up close to 10% on the USD over the last twenty-four hours and a little over 4% on BTC. Interestingly, this isn’t one of those coins that has rocketed during 2017 (the company behind it only conducted its ICO back at the end of June) and this is likely one of the factors that’s driving the increase we are seeing right now.

What do we mean by this?

Well, there are a number of traders and investors that are sitting on the sidelines at the moment feeling as though they’ve missed the boat on the incredible gains many have logged on the back of cryptocurrency positions year to date. Many of the coins that have turned out these incredible gains are now trading for hundreds if not thousands of dollars apiece, meaning that said traders and investors are only able to pick up a limited exposure to any upside potential and – in turn – that the upside potential is somewhat limited based on the limited position size.

What this is translating to, then, is traders seeking out those currencies that are yet to pick up huge runs on the back of large inflows of volume, one of which is Elastic. As such, and if this concept is valid a valid one, we could just be seeing the beginning of a much larger revaluation for XEL as we head into the close of 2017 and beyond.

So what’s this coin all about?

The company behind XEL, Elastic, which, as mentioned, conducted in ICO back in June this year, is set up to build the first decentralized supercomputer. The concept is relatively complicated but, for the purpose of simplicity, it’s essentially an open source project designed to create what Elastic refers to as a decentralized trustless supercomputer, which is built on cryptography and blockchain technology. The company has created its own proprietary programming language (called ElasticPL), which accounts for one of four major elements of the project – a dedicated blockchain, a core client and the XEL miner.

So where does XEL come into the equation?

Well, in order for people to use the decentralized supercomputer for whatever purpose, they need to pay for the computational power that they require. This computational power is provided by miners, which are rewarded in XEL. So, people buy XEL and use it as a transaction token in return for computational power provided by the miners on the network and, in turn, the latter receive the XEL as a reward – similar in concept to the way that miners on the bitcoin network receive BTC as a reward for the computational power that they dedicate towards solving algorithms and verifying transactions.

So, why is this one running today?

A quick look at the usual communication channels doesn’t reveal anything groundbreaking outside of a pending website redevelopment (which is set to be released near term), and it’s this that leads us to the conclusion that the recent run is rooted in an inflow of speculative volume in anticipation of a much longer term upside move.

If this is the case, it makes for a risky trade, given that we are probably going to need some sort of fundamental development to serve as support for the action we are seeing at some point. Right now, however, that doesn’t make it a non-starter. There could be plenty of room on the upside of the equation before any such fundamental development is required and – for us – this makes Elastic and its XEL token a real potential winner at current prices.

We’ll be on the lookout for any communication from the team over at Elastic as supportive of our thesis and, for now, we’ll be basing our bias purely on volume.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Image courtesy of Elastic