Pi Network experienced a significant crash following its mainnet launch, resulting in a $6 billion loss within the first two days.
Trading at $0.76 on Saturday, Pi Network (PI) plummeted from its launch price of $2. Here are the four primary reasons attributed to the dramatic decline in Pi coin value.
Pi Network Faces Price Decline Amid Scam Allegations
A crucial factor contributing to the price drop was the public scrutiny from industry leaders. Notably, Bybit’s CEO accused Pi Network of being a scam, referencing a report that claimed the project targeted the elderly. This statement has stirred concerns among potential investors.
In response, Pi Network has firmly denied these allegations, asserting that it is a legitimate crypto project that has been under development for six years.
This criticism from a prominent exchange CEO gained attention, particularly on the same day as Bybit’s exchange faced a $1.4 billion hack, drawing more controversy to the situation.
Panic Selling by Early Adopters
Another reason for the crash was the sudden decision by many early adopters to sell off their tokens after the mainnet launch. Historically, token holders tend to liquidate their assets quickly post-launch to avoid potential losses, especially after observing similar trends in tap-to-earn tokens that failed to recover after their launches.
Market Trends Impact New Token Launches
The crash in Pi coin prices aligns with a wider trend in the crypto market where numerous recently-launched tokens have also seen sharp declines. Tokens like Wormhole and ZkSync initially surged after their airdrop events but later plummeted significantly, indicating a general instability impacting new cryptocurrencies.
Crypto Market Weakness Exacerbates Pi Network Collapse
Additionally, the ongoing downturn in the overall cryptocurrency market has intensified the situation. Bitcoin, for instance, has retreated from its all-time high, with major altcoins like Ethereum and Cardano also experiencing substantial drops. The crypto fear and greed index has shifted from extreme greed to the neutral zone, reflecting a cautious sentiment among investors.
Future Prospects for Pi Network Pricing
Predicting a rebound for the Pi Network coin remains uncertain as it navigates a price-discovery phase. Recovery would likely require increased demand from investors and growth within its ecosystem. As of the mainnet launch, Pi Network featured around 100 applications, and successful user engagement with these applications could act as a catalyst for price recovery, similar to how significant dApps have historically bolstered networks like Ethereum.
