Is Huobi Token a Good Investment?

Huobi Token is known to offer various perks for Huobi users, but is it worth every penny? Read this before you invest in it.

From the famous Bitcoin and Ethereum to the newcomer Solana, there are thousands of different cryptocurrencies in the market, making it harder for new traders to decide which coin they should pick. One of the easiest ways to categorize cryptocurrencies is by looking at the coin's developer or issuer. This can be helpful to determine whether the crypto is reliable, safe, and profitable.

Technically, anyone can issue a cryptocurrency, but the process requires heavy commitments of time, capital, and other resources as well as advanced knowledge, particularly in technology and blockchain. Cryptocurrencies that are issued by crypto exchanges are called exchange tokens. These tokens are native to a certain exchange and can be used for various different purposes.

Lately, crypto exchange tokens are becoming pretty popular. Several well-known exchanges have released their own native cryptocurrencies and successfully attracted many new investors. Binance's BNB token, for instance, is currently occupying a spot in the top ten cryptocurrencies. Another token that is currently on the rise is Huobi Token. From the outside, the token seems very appealing due to its numerous perks, but is it really that good?

Introduction to Huobi Token (HT)

Huobi Token (HT) is a decentralized digital asset that's based on the Ethereum blockchain and the native token of Huobi Global, a leading crypto exchange that was first founded by a computer engineer named Leon Li back in 2013. The token itself was launched in January 2018, following the footsteps of several other loyalty-based tokens that other exchanges have launched.

Generally speaking, Huobi Token is a tradable asset that can be bought, sold, or traded on the global crypto market. But apart from that, Huobi Token offers several other functions and benefits for its holders in exchange for their loyalty.

By simply holding the tokens, users can get various rewards from Huobi Global and get a better opportunity to generate more money. Even though the project is still considered young at this point, Huobi Token has contributed to the success of Huobi Global in the past few years and it continues to attract new worldwide users to this day.

What Benefits Can You Get?

Now you might be wondering what exactly are the benefits you can get from using Huobi Token and why should you consider investing in it. To answer your question, we have compiled a list of various benefits that Huobi Token offers.

See also: Huobi Exchange Review

Transaction Fee Discount

This is a benefit that appears in almost all exchange-based tokens. In Huobi Global, users can use Huobi Tokens to purchase a VIP status, which comes in multiple levels. VIP status operates on a monthly subscription, so users would have to pay every month. Different levels grant different benefits. The highest of the levels gives a 50% discount on transaction fees.

Here are the details of the levels and the amount of tokens required for each one.

The system is more or less similar to Binance's discount scheme, except there's no time limit on when the status expires. As long as you pay your monthly subscription, you could enjoy the discount for many years ahead.

Tradable Against Popular Crypto Assets

Huobi Token can also work like regular cryptocurrencies, so the token can be paired up with other currencies like Tether, Bitcoin, and Ethereum. The additional benefit of being an exchange-based token is immediate listing on the exchange. So, the day that the token completed its token generation event, it was instantly listed on Huobi.

Survey and Voting Rights

Huobi Token also grants its holders the right to vote on key decisions in the exchange. This includes a wide range of topics like which assets the exchange will list next. This can be a transparent, democratic way to participate in the improvement of the exchange and make it better for the users.

However, it's also necessary to point out that this system may allow project owners to steer the wheel since they have the power to purchase a lot of tokens and vote for themselves. Such pay-to-play scenario creates an environment that makes it possible for the listed projects to be simply the ones with the most money. The bright side is that for spectating investors, this situation could mean high demand for the token.

Early Access to Special Events

As a part of the VIP status subscription feature, Huobi Token holders can enjoy the benefit of early access to special events or assets that will be traded on Huobi. This can be a rather valuable perk for active users to stay updated with current events and grab the opportunity as soon as possible.

Liquidity Buybacks

Every now and then, Huobi would use earnings from transaction fees to buy back a certain amount of Huobi Tokens. Generally, this seasonal buyback has two main purposes:

1. To encourage liquidity in the pricing and circulation of Huobi Tokens and prevent hoarding of the tokens.
2. To restore the Huobi User Protection Fund with the tokens.

The protective funds are used to protect users from manipulative or fraudulent activities and compensate losses in the case of an emergency.

Huobi Token Price Fluctuations

According to CoinMarketCap, Huobi Token was first launched at $1.49 in February 2018 and it didn't take long before its first rally. The token rose up to $2.83 on February 14, following a promotional event that was announced for the token. The event basically rewarded traders with up to 6,666 Huobi Tokens if they traded them within the next 24 hours.

In June 2018, Huobi announced the launch of the Huobi Chain Project, which is a public chain for financial protocols. The project was meant to be built by the community and people would be rewarded with Huobi Tokens for their participation. The token's price rose to $6.10 on that very day.

Unfortunately, the bullish behavior didn't stay long as the price dropped to below $4 by the end of the month. The drop continued for the next 18 months and stopped at an all-time low of $0.89 in January 2019.

Things started to get better in March 2019 as the platform launched a new feature called Huobi Prime. This service basically lists new blockchain assets that users can purchase early by spending Huobi Tokens. The token immediately rallied and eventually reached its peak at $5.25 on August 9.

In the period after that, the token dropped in price again until after Huobi launched the Huobi Chain testnet in February 2020, which only supports Huobi Token in its network. The token managed to reach $5 and stayed in that range for the next few months.

At the beginning of 2021, the token rose up significantly after the launch of an eco-chain called Heco. The spike was also partly caused by the bullish behavior of the wider crypto market. In May, the token jumped by a mile and reached an all-time high.

However, the token was unable to maintain its bullish valuation and went back to below $15 by the end of May 2021. It continued to drop and settled at around $10. Since then, the price keeps fluctuating depending on the situation and promotional activities of the exchange. At the time of writing, Huobi Token is sitting at $4.68. The current ranking of market cap is #59.

How to Buy Huobi Tokens

The easiest way to get Huobi Token is to buy it on the Huobi exchange. You can choose from the various trading pairs offered by the exchange. However, it is worth mentioning that buying Huobi Tokens is certainly more complicated for US traders because Huobi is not available in the United States.

Some crypto exchanges like LBank and Gate.io support Huobi Token though, so you can purchase them from those platforms. Last but not least, if you don't have access to any of the mentioned exchanges, you can always acquire the token by speculating on the price.

Once you got the tokens, you could store them in any wallet on Ethereum because Huobi Token is an ERC-20 token. For better protection, it is recommended to use a hardware wallet like Ledger Nano S. Otherwise, you can use other options like a paper wallet from MyEtherWallet or others.

Final Thoughts

Huobi Token offers a huge opportunity for crypto traders to reduce their trading fees on the Huobi exchange. It's particularly suitable for large investors or institutional traders because while it can significantly limit their expenses, it also requires them to pay a monthly subscription for VIP status. Having a large number of Huobi Tokens also grant them a big voting power, so their choices are more likely to come true.

However, before you invest in Huobi Tokens, it is important to consider the volatility of the token. There's no guarantee that the token is going to keep trending in the future, so make sure to do your research beforehand, prepare solid risk management, and don't trade more than you can afford.