Binance project Matic sees 70% price dump; CZ says devs are not to blame

Projects that emerged from Binance Launchpad in 2019 are usually extremely popular for quite a long while, and their success is something that is rarely being questioned. The same was expected from the project known as MATIC, which recently held an IEO on the platform.

However, after the initial price surge that allowed MATIC price to grow by 200%, the project suddenly crashed and lost 70% of its value.

MATIC team is not responsible

The development was unexpected, to say the least, and even Binance’s CEO, Changpeng Zhao (CZ) announced that his team is investigating what went wrong. However, Zhao was quick to announce that MATIC team members had nothing to do with the price dump. According to him, a small price correction likely escalated after a number of bigger traders panicked, which ended up causing a cycle.

MATIC itself negated any involvement in the new development, and the team even published a blog post in which they explained why they are sure that they are not responsible.

The project concludes by stating that MATIC will definitely bounce back, and return stronger than ever in the future.

The very idea that the project had something to do with the dump came from a baseless accusation from a certain Twitter account. Of course, MATIC did release new tokens, but they did everything ‘by the book,’ warning the community about their plans well in advance.

The project then released around 2.5% of the token’s total supply. The project’s team explained all of this in their blog post, which was followed by an apology from the owner of the account that initially tweeted the accusation.

Twitter’s crypto community continues to speculate

As mentioned earlier, Binance’s CEO, CZ, stated that the situation escalated due to panic from big traders. In other words, Zhao believes that whales might be responsible for the price dump, and he is not the only one. Others have expressed the same thoughts, believing that a major whale may have dumped everything they have managed to accumulate, causing a panic and an oversale along the way.

looks like a big whale dumping everything he has on the market followed by panic selling

— Cæsar 🏦 (@PARABOLIT) December 10, 2019

Some reports suggest that the reason might be low liquidity of MATIC on Binance or the fact that Binance allows margin trading on MATIC and other similar altcoins.