The cryptocurrency market, in general, has seen a massive price drop since last year after staging a huge price pump. Bitcoin had recorded a massive run-up to an all-time high of $69k sometime last year, same with many other tokens recording their profits in thousands of percent.
Axie Infinity’s AXS was no exception; particularly, the token had a massive year for many investors who had bought in early. Also, those were the times play-to-earn gaming platforms were all red-hot in the market. AXS then recorded a significant price spike from $1.8 to an all-time high of $166.9, representing a 92x price increase. However, ever since then, the asset has equally lost all of it to the prolonged bear market.
Let’s consider some reasons for this price drop and also see if there’s any hope for a recovery.
Axie Infinity Hit By Hackers
Many tokens naturally saw downward pressure due to the bear market, while some had a really rough year together due to different hacker activities attacking different projects and taking away millions of dollars. Many DeFi projects were victims of this hacker activity.
This was the case of Axie Infinity (AXS) when it lost $625 Million in 173,600 Ethereum and 25.5 million USDC to hackers who attacked the Ronin bridge.
After the incident, which took place in March 2002, progressively, the AXS token saw a massive sell-off as the token dropped from $75 to around $11.
Token Unlock By The Team
The Axie Infinity (AXS) revealed through their official twitter handle that the team would ultimately unlock a massive 21.5 million AXS for the platform’s staking, team, and advisors, representing 8% of its total supply.
That has caused panic among investors, and sell-off pressure kicked off for the asset as many anticipate further price drops to low levels of $5 or lower.
Aleksander Leonard Larsen, co-founder, and COO of both Axie Infinity and Sky Mavis, highlighted that there is a lot of misunderstanding about the imminent $AXS token unlock that has to be rectified.
By pointing out that tokens that have been unlocked are different from tokens that are now in circulation, he attempted to quell the fear and regain the trust of investors who were considering liquidating their holdings. He continued to elaborate in the following tweet thread, explaining the token unlock is simply the usual schedule:
With the upcoming $AXS token unlock there is a lot of misinformation that should be clarified
First, tokens unlocked are not the same as tokens in circulation
According to the unlock schedule, there could be 151M in the market, but there are only 102M in circulation.
How?
— Psycheout.ron (@Psycheout86) October 20, 2022
Axie Infinity (AXS) Market Cap Falls Below $1 billion price mark
With the news of a token unlock, the asset took further decline as reflected in the Market capitalization and the price.
Currently, AXS market capitalization sits at $861,069,398 after clearing out about $200m within the last weeks, according to data from CoinMarketCap. The Axie Infinity price today is $9.17, up 6.68%, with a 24-hour trading volume of $213,194,219.
It’s still safe to say that despite the price drop, the asset is still very much preferred by investors as it still maintained its top spot as one of the top Metaverse projects with 275,701 total holders.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any projects.
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