After a series of bulk sales launched in July, the market value of the LINK token was erased by approximately $ 600 million. Following the 4chan media activity run by the Chainlink development team, the price fell by around 60% after rising above $ 4.80 on June 29th.
After collecting $ 32 million in the Chainlink 2017 ICO, crypto analysts were already criticizing skewed distribution measurements. From a total of 1 billion LINK, the development team had 650 million Link, while the remaining 350 million tokens were circulated in the market. Despite the dubious basis of these unfavorable scenarios, ChainLink’s market value has risen by more than 3,710% in less than two years.
However, most of these gains were collected earlier this year after 4chan’s biz’s / board marketing activity. Within a few weeks, ChainLink experienced a rally of about 10x.
Shortly thereafter (July 6), the Chainlink development team made a statement that should be seen as an ominous warning signal for any crypto trader who is exposed to the rise:
As we increase the number of people working at Chainlink, we sincerely appreciate the continued support and understanding of our community, and we will do our best to ensure that our expansion plans are fulfilled responsibly, and we carefully manage the company’s resources, capital, and LINKs.
In the press release, we can see that the development team tells its investors that ChainLink team must sell some of its huge assets to hire new people. However, these allegations remain controversial given the fact that ChainLink raised $ 32 million during its ICO less than two years ago.
Similarity with XRP
The ChainLink story is very similar to the events in the XRP, where another series of unfortunate market practices have caused significant losses for investors.
As Bitcoinist reports, Ripple Labs systematically sold an average of 2,425 Billion XRP tokens each year. When many coins in the crypto market fell by + 90% during the 2018 market periods, the XRP values fell by roughly 88% (compared to the BTC match). Despite the huge losses felt by most investors, Ripple Labs still made more than $ 530 million in incredible profits.
According to data compiled by Etherscan, heavy sales pressure was directed to ChainLink over a 40-day period when 700,000 Connections were sold on 14 different days. When a total of around 10 million links are sold, this creates an estimated market value of around $ 30 million.
The history of the chart shows large volume increases only on June 13 and June 29, thus creating suspicion in the market. Both periods are accompanied by increases in market value. The second-largest volume increase rose to $ 860 million, with a total market value of $ 1.4 billion.
Trends have since then declined to more normal levels with volumes of around $ 70 million and prices below $ 2.50. However, these deviations from the historical averages show that ChainLink can make more recommendations for those who follow the story.