Successfully investing in cryptocurrencies is no easy feat. If it were, a hell of a lot more people would do it and the entire crypto industry would be much larger.

When you think about it, the crypto industry is tiny in comparison to traditional markets like forex, stocks, bonds, commodities, etc.

Just look at the entire crypto market cap (all of the crypto’s market value combined), it’s under $200 billion.

The Forex market alone trades an average of $5+ trillion per day, the stock market is another trillion-dollar market and so are the rest of the traditional markets!

It’s obvious that cryptocurrencies are still very much in their infancy as the world’s ‘real money’ hasn’t even begun to dabble in this nascent industry.

So, what’s holding the big money back?

There are multiple legitimate reasons and theories as to why the crypto market is still so small but I’m going to break it down to a very simple and generic reason.

The average person is very skeptical about Bitcoin and cryptocurrency.

For instance, when most people (which are skeptics) hear or learn about Bitcoin they ask, what is it backed by? What gives it value?

Then they bring up the US dollar (USD) as a comparison and say “the USD is backed by the government, the federal reserve, the world’s largest army, a thriving economy, Trump… bla bla bla.”

However, little do they know that the USD is a failing experiment backed by nothing but smoke and mirrors. They don’t really understand it, they just think they do.

Meanwhile, Bitcoin’s value proposition is much stronger as sound money.

Bitcoin should have value because it is cryptographically secure, resistant to censorship, decentralized, finite in supply, and is backed by mathematics and Proof-of-Work (PoW).

While that sounds really good to you and me, to the average person it does not. They don’t understand the importance or value of these attributes and simply side with the mainstream.

Perhaps one day, once the infrastructure supporting Bitcoin improves and it becomes more usable and mainstream, people will begin to understand its value proposition.

But until then, we must understand what the majority of people value and understand what they choose to invest in.

So, what does the average person invest in?

The average person who invests will generally invest in stocks.

Why?

Because stocks are backed by real companies, with real products, real sales, real earnings, real CEOs, and real customers.

Investing in stocks is easy for people to understand because they can see how the company they’re investing-in is performing in the real world. Not only that, they can invest in companies that offer products and services they love and support.

That’s why most people prefer investing in stocks over ‘magical internet money’, ‘virtual currencies’, ‘digital currencies’, ‘cryptocurrencies’, ‘tokens’, or whatever the mainstream prefers to call them.

Crypto, as it stands today, has very little adoption and therefore its hard for people to value. In fact, crypto’s value is primarily fueled by speculation rather than real usage, products, services, revenues, and all of the other things that give a company’s stock value.

However, there is one class of cryptocurrency that differs from the rest by having many of the same attributes as traditional stocks – this class of cryptos is exchange utility tokens.

Exchange Utility Tokens

Traditional investors can better understand the value proposition of exchange utility tokens because, like stocks, they are backed by real companies with real revenue. The success of an exchange token is highly dependent on the success of the exchange.

Investors can track various crypto exchange metrics such as user growth, quarterly revenues, trading volume, etc. Therefore, investors can more easily understand whether or not a particular exchange’s token is worth investing in.

Also, unlike many cryptocurrencies, exchange tokens have real utility and are actually used by real people. They can be used to pay fees, grant users’ discounts, and provide access to exclusive exchange offerings.

Therefore, out of all the cryptocurrencies, exchange tokens are the closest thing to traditional stocks or shares of a company – something in which the average retail investor can get behind.

That being said, an exchange token that has recently caught my attention and is high on my radar is Huobi Token (HT) – the second most popular crypto exchange token.

Now, for the remainder of this article, we’ll take a deep dive into Huobi Token. We’ll look at its price action, it’s utility, level of adoption, it’s tokenomics, unique features, and the risks and challenges it faces.

By the time you’re done the reading, you’ll have a fundamental understanding of whether or not Huobi Token (HT) is a good investment.

Huobi Token (HT) - Summary

Huobi Token (HT) is the native exchange utility token of the Huobi crypto exchange – a globally leading digital asset exchange serving professional users.

Huobi is a major cryptocurrency exchange that was incepted in 2013. The exchange was initially based out of China and later moved its headquarters to Singapore following China’s crackdown on crypto-related businesses in September 2017.

The Huobi exchange now has offices in Hong Kong, Korea, Japan, and the United States and offers its trading services across the globe through Huobi Global and various local Huobi exchange arms.

Some key features and accolades of the Huobi crypto exchange are as follows:

Trading of over 230 crypto assets

Support for 27 different fiat currencies

Currently does nearly $4.8 billion in 24 hr trading volume

Margin trading with up to 5X leverage for spot trading

Futures trading for 9 different cryptocurrencies

Much more

Now, back to Huobi Token (HT).

The Huobi Token was launched in January 2018 as an ERC-20 exchange utility token that rewards Huobi exchange users with fewer fees for using the platform.

Instead of launching through an initial coin offering (ICO), Huobi Tokens were distributed to Huobi exchange pro users who purchased a discounted service package that included HT which gives a discount toward trading fees.

Over the course of 15 days, 300 million HT (60% of the total supply) was distributed to these users. As for the remaining tokens, 20% (100 million HT) was reserved for team incentives and subject to a 4-year vesting schedule with 0.25M unlocked each year. And another 20% (100 million HT) was reserved for user rewards and platform operation.

At the time of writing, Huobi Token’s circulating supply is 241,284,047 HT and its price is trading at ~$2.75.

Huobi Token (HT) Utility & Benefits

Huobi Token has adopted many of the same features and utilities as pioneering exchange utility tokens like Binance Coin (BNB), but it also offers various benefits to token holders that are unique to HT.

For instance, the HT token is designed in such a way that drives liquidity, demand, and ultimately the price of its token.

See below, Huobi Token’s utility and unique features within the Huobi exchange ecosystem and beyond:

Huobi Points & Transaction Fee Discount

Traders on Huobi can benefit from discounted trading fees in two different ways:

1st by buying a Huobi Point Cards with HT tokens and using the points to pay fees

2nd by simply holding a certain number of HT tokens and receiving discounts based on how many HT tokens are held.

In addition to these two methods of receiving discounted trading fees, the transaction fee discounts are also based on the trader’s tier, ie Lv.1 - Lv.7. These 7 tiers are based on a trader's 30-day trading volume (in BTC) and HT holding snapshot data.

See the tiers and corresponding fee deductions below:

Additionally, professional traders benefit from even greater fee deductions when holding ≥ 5000 HT. Traders holding 100,000 HT receive the greatest fee deductions:

Liquidity Buybacks

The Huobi exchange takes 20 percent of its quarterly revenue and buys back Huobi Tokens in the open market at spot market rates. They do this to maintain HT’s liquidity and to reduce its circulating supply which in turn, should increase its price.

The Huobi Tokens purchased by the exchange are forever destroyed so they can never be dumped on the market again. This is why Huobi Token’s circulating supply is less than the 300 million (60 percent supply) that was initially sold to investors.

Early Access & Exclusive Events

Huobi Token holders benefit from early access to new token listings and various other events like token giveaways or airdrops. The early access and events granted exclusively to HT holders may be dependant on the token holder’s VIP status.

Voting Rights

In the same way that stockholders can sometimes vote on certain decisions made by a company, Huobi Token holders can vote and participate in various decisions made by the Huobi exchange.

For example, Huobi has enabled HT holders to vote on which new assets get listed on the exchange. HT holders can also participate in exchange surveys and cite suggestions on various improvements and new features.

Trade HT Markets

Huobi supports over 40 Huobi Token (HT) trading pairs including Tether (USDT), Bitcoin (BTC), Ethereum (ETH), and other popular cryptocurrencies.

Therefore, besides using HT to buy VIP packages, receive trading fee discounts, attain voting rites, gain exclusive access to events and more, you can still buy Huobi Tokens and speculate on its future value.

Huobi Global Ecosystem Fund

The Huobi Token is used to fund Huobi Eco, which is the ecosystem for Huobi Group. Huobi Tokens are allocated to various investment funds that focus on building out blockchain technology and Huobi’s ecosystem.

Corporate Payments

Huobi Tokens can be used as a payment method at a wide variety of corporate businesses including community service providers, multiple incubators, mining machines of head brands, top 10 mining pools, 30+ crypto media, and various head-hunting companies.

Huobi Token (HT) Price Action & Market Structure

Now that we have an understanding of what HT is and what it's used for, let’s dive into Huobi Token’s price action and determine if HT is a good investment today.

The first thing to look for when analyzing a cryptocurrency’s price action is whether or not it is maintaining a good market structure.

For the uninitiated, market structure refers to an asset's macro price action. For an asset to be considered a good investment, it must be building a solid market structure or maintain above its market structure.

If an asset has not yet built a solid market structure or has broken its market structure, then it shows signs of weakness in the asset and would not be considered a good investment.

Let’s see if Huobi Token (HT) has a solid market structure and is holding above it.

The chart above shows Huobi Token’s price history starting from February 3, 2018, to January 2, 2020, on a log scale.

As you can see, HT started trading around $1.40 and quickly jumped up to the $2.40 - $2.60 range before crashing back down to $1.40 and holding this price level as support.

In the months following, HT reached its all-time high (ATH) of $5.94 on June 5, 2018. It then crashed down and consolidated around $1.50 before reaching all-time lows (ATL) below $1.00 in February 2019.

Since those lows, Huobi Token has really taken off and reached a local high around $5.00. However, the price has since corrected and is currently consolidating between $2.40 and $2.80, which is a significant level of solid market structure.

As seen from the chart above, the price of Huobi Token is holding above a key price level of around $2.50. This price level can be considered Huobi Token’s level of market structure as the price has tested this level as support or resistance multiple times.

All in all, if the price of Huobi Token manages to stay above $2.40 and move upwards from there, HT would be considered a good investment.

Huobi Token (HT) Risks & Challenges

While there are many benefits attached to Huobi Tokens, it is also important to understand the risks and main disadvantages of HT. By looking at both the good and the bad of any particular cryptocurrency, you can better make informed investment decisions.

See below, the risks and disadvantages specifically associated with Huobi Tokens:

Looming Regulations

Many jurisdictions have threatened to pass harsh regulations in regard to cryptocurrencies. While this risk affects all cryptocurrencies, it could potentially affect Huobi Tokens even more because it is an exchange token and its success is driven by the success of the exchange.

If harsh crypto regulations come into effect, fewer people may be enticed to buy and trade cryptocurrencies and the Huobi exchange and token would be affected very negatively.

Exchange Hacks & Failure

Again, since the Huobi Token’s success is highly dependent on the Huobi exchange, if the exchange suffers a major hack or failure the price of HT could be severely impacted in a negative way.

Huobi is a centralized exchange and therefore the Huobi Token’s success is dependent on a centralized entity. If the exchange suddenly ceased all operations, the Huobi Token would no longer have much of a value proposition and would most likely die.

Conclusion

Huobi Token is the second most popular exchange token and is currently ranked 17 on CoinMarketCap. The Huobi exchange is among the leading cryptocurrency exchanges and is constantly evolving and expanding its services and products offering.

Huobi’s global success has instilled a lot of faith in its Huobi Token and it's projected to continue growing and do very well in the future as well. The Huobi Token is heavily utilized within the Huobi ecosystem and the HT token supply is continuously diminishing through HT buybacks and token burns.

All in all, if Huobi continues to be a successful exchange and the entire cryptocurrency market and ecosystem continues to grow, I would say Huobi Token (HT) is a very good investment.

What do you think about Huobi Token (HT)? Do you think it’s a good investment? Why or why not?

Let me know in the comment section below.