Internet Computer (ICP +3.21%) is a cryptocurrency that initially promised to act as a huge decentralized cloud and reshape the internet as we know it. So far, it has not lived up to those expectations.
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After trending lower for several years, it surged briefly late last year, then again in mid-January on the back of a white paper that promised to reduce supply growth by 70% by the end of the year. Improved tokenomics can be part of what makes a cryptocurrency valuable, but only when underpinned by solid fundamentals. Internet Computer has since erased those gains.
I won't be adding Internet Computer to my portfolio in 2026. It sounds great on paper, but I can't see how it will ever regain investor trust after such a disastrous showing. Moreover, the crypto metrics indicate it hasn't attracted many developers or users.
1. Internet Computer never recovered from its false start
Long-term cryptocurrency investors may remember the super-hyped launch of the Internet Computer token in May 2021. The project had huge potential, with an impressive team and big backers such as Andreessen Horowitz and Polychain Capital.
The token shot up to $461.65 and at one point was one of the top 10 largest cryptos by market cap. It then dropped dramatically, falling more than 90% in the first few months. It has never come anywhere close to that initial high and is currently trading at about $2.28 -- down more than 99% from its high. It's a shocking descent, even by volatile cryptocurrency standards.
CRYPTO: ICP
Key Data Points
There's all kinds of speculation online about how such a high-profile token launch went so wrong. For example, Arkham Intelligence reported that the Dfinity Foundation, the organization behind Internet Computer, hadn't been transparent about token vesting, among other things. That report was later questioned by Crypto Leaks. Investors brought a lawsuit against Dfinity, which a judge dismissed last year.
At this point, the damage is done. What matters most is that Internet Computer hasn't been able to shake it off. With thousands of cryptocurrencies out there, investors are extremely unlikely to ever give it a second chance.
2. The numbers don't look good
In 2024, Internet Computer said it was uniquely placed to integrate artificial intelligence (AI) with blockchain. Its Caffeine platform lets people build apps and websites on the blockchain using natural language. But it hasn't taken off. It seems that even the magic of AI cryptos couldn't stop the price's downward momentum.
A look at the data shows that Internet Computer does not have many active developers or users on its network. Per Electric Capital, it has 187 full-time developers compared with Ethereum's 3,699. DefiLlama data shows it has $11.5 million in total value locked, putting it in 85th position in terms of the funds on its ecosystem. For comparison, Ethereum has more than $60 billion and Solana has more than $8 billion. It has 17 protocols running, compared with more than 1,700 on Ethereum.
There is a small chance that Internet Computer's AI offering will revitalize the project. But it is far from the only AI investment, crypto or otherwise, out there. And some of the others don't carry anywhere near as much baggage.
