Sui Token Price Drops 66% Since Mainnet Launch
Sui’s native token has seen a significant drop in price since the launch of its Layer 1 blockchain mainnet in May. The token’s price went from a high of $1.40 to $0.48, causing the market cap to plummet from $740 million to as low as $343 million. The decline in price can be attributed to users allocated tokens from the “Community Reserve” selling off their holdings. The Community Reserve, managed by the Sui Foundation, owns more than half of all SUI tokens and distributes them to validators, developers, and community members. However, the lowered price may attract retail investors looking to buy low.
Founders and Early Investors Could Still Profit Despite Market Cap Decline
The dramatic decline in Sui’s market cap could pose challenges when the project’s founders and early investors are able to sell their tokens in June 2024. However, even if the token loses most of its initial market cap, the founders and early investors could still profit hundreds of millions of dollars. Mysten Labs, the creator of Sui, raised $300 million less than a year ago at a valuation of over $2 billion. The company was founded by former Meta employees who worked on crypto initiatives for the tech giant. Mysten Labs has been highly regarded in the blockchain space.
Hot Take
The drop in Sui token price after its mainnet launch raises concerns about the sustainability and long-term success of the project. While the lowered price may attract retail investors, the significant decline in market cap could have consequences when founders and early investors are able to sell their tokens. Despite this, Mysten Labs has a strong reputation in the industry and could still generate substantial profits.
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