December 12, 2019 – Matic Network, a scalability-focused Ethereum-based cryptocurrency, suddenly nosedived by 70 percent.
Up until after-midnight December 10, the altcoin was just hovering above $0.041, continuing its four-week rally. Then after slowly retracing back to $0.035 in several hours, it suddenly dropped to $0.012, wiping out the price appreciation gained from the past few weeks’ momentum in approximately an hour.
The dump has caused turmoil for traders and other concerned parties including the Matic Network team and Binance CEO Changpeng Zhao (CZ). On a side note, the aforementioned blockchain project was one of the firsts IEOs made available in the Binance Launchpad.
Who is to blame?
The Matic Network team said in their blog post that the selloff was triggered by a tweet posted by Samuel Gosling, founder of Validity Crypto, a cryptocurrency evaluation platform. According to the team, Gosling’s tweet was completely baseless.
Gosling allegedly created FUD (fear, uncertainty, and doubt) by stating that the Matic Network Foundation had transferred 15% of the token supply (worth $67 million) in the past 50 days, and that some of which seem to have been sent to Binance for liquidation.
He later apologized for providing inaccurate information, as it turns out that only 3% of the supply seems to have been liquidated, not 15%.
Gosling didn’t get his facts straight, and neither did the MATIC team. The plunge of the token transpired hours before the Twitter post, which means the tweet couldn’t have been the trigger.
Although the exact reason for the massive dump is still unknown, the Binance team is actively investigating the matter. Despite several criticisms from the community, CZ voiced out stating that “it’s already clear that the MATIC team has nothing to do with it.”
Instead, the crypto tycoon directed the criticism on whales and bagholders, as he added in a tweet:
“A number of big traders panicked, causing a cycle. Going to be a tough call on how much an exchange should interfere with people’s trading.”
A number of companies, investors, and key influencers in the cryptocommunity also voiced their support for MATIC.
Some investors, however, don’t buy the whole “weak hands” hypothesis as the main cause of the coin’s plunge, as they suspect foul play. Altmarket founder Bryce Weiner posted a thread on Twitter accusing the MATIC team of orchestrating a pump and dump scheme.
Other #cryptotwitter community members were eager to join in the conversation, some even stating that CZ conspired with the MATIC team to dump on their investors. Nonetheless, there’s no concrete evidence to support such accusations.
Fortunately, the altcoin is slowly recovering back to the $0.02 level, although it is uncertain if and when it’ll ever get back to its previous highs.
This article is published on BitPinas: [What Happened] The MATIC Dump