Here’s What We Think Is Driving Sphere (SPHR) Right Now

Sphere (SPHR) is a bit of a strange right now. the coin has seen a dramatic increase in value over the last couple of weeks, running from $3.70 apiece to just shy of $11 as things stand and, at the same time, reaching a market capitalization in and around $34 million.

Central to this appreciation has been a large uptick in volume, with nearly $23 million worth of SPHR trading hands during the last 24 hours alone. When you see two-thirds of an asset’s total market capitalization trade hands in less than 24 hours, it starts to raise some flags. Not necessarily red flags, of course – in the more traditional equities markets a large uptick in volume can precede a spike or a breakout to the upside – but flags in the sense that we start to see attention turned towards the coin and the underlying company as people try to figure out what’s going on.

SPHR Daily Chart

So, with this in mind, let’s turn our attention to Sphere and see if we can clear things up a little.

There are a few different blockchain projects out there named Sphere, so don’t get confused. This one is a decentralized peer-to-peer payment network, secured through a proof of stake consensus blockchain. In concept, it’s designed to act as an efficient and secure means of commerce, while also serving as an appreciating token for traders and long-term holders.

­In other words, it’s a sort of payment/investment asset that’s designed to incorporate certain features of what we might call first and second generation tokens (bitcoin, Litecoin, etc.) but bring a bit of third generation flair to the mix.

It’s a bold vision and it’s one that, to date, has managed to attract a reasonable amount of attention. Indeed, earlier this year, rumors that Microsoft was investing in Sphere, alongside legendary bitcoin investor Tim Draper, hit press – but these have yet to materialize far as anything official is concerned.

One of the problems with this company is that development is relatively slow, or at least, any updates as to how the project is coming along are slow to hit press. This isn’t necessarily a sign of any lack of operational advance but, in this sort of market, and especially under current market conditions, communication between a company and its token holders is a real positive.

Of course, even against the backdrop of this relatively sparse level of communication, SPHR has managed to appreciate substantially over the last few weeks so, what’s driving the gains?

Management has long been communicating that it expects to transfer the current token over to what’s called the UBIQ network, which is a sort of upgraded Ethereum type smart contract platform, near term.

When this happens, SPHR tokens will be exchanged for an ECR20 compliant token and listed on major exchanges – starting with (reportedly) Bittrex.

This has – as mentioned – been in the works for some time but the recent action suggests it could be just around the corner. It would be a real watershed moment for the company and its coin holders if it plays out so, as far as the recent action is concerned, it looks as though its rooted in a degree of speculative loading in anticipation of this watershed moment coming to fruition.

So what’s next?

Well, near term, we think there’s plenty of room for further appreciation on current levels ahead of any ECR20 exchange. If the exchange takes place, it’s areal upside driver. If we don’t see it happen within, say, 30 days, we’ll likely see a correction and then the speculative loading cycle will start all over again.

From a trader standpoint, then, it’s all about risk tolerance. The riskier (but higher reward) trade is to take a position now and wait for the switch.

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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 Sphere.