Earlier today, Liquity Protocol ruffled some feathers after publishing an announcement stating that Circle, the issuer of the USDC stablecoin, had acquired the project. The post made on its official X account quickly caught the eye of many, triggering market action among traders who missed the April Fool’s Day spirit of the post.
Within hours of the post going up, Liquity’s token recorded an approximately 11% spike according to CoinMarketCap, before dropping back to its usual activity once users realized the intent of the post.
Liquity makes a habit of trolling Circle
The recent attack on Circle follows a series of posts put up by Liquity to take subtle and sometimes, overt jabs at Circle and USDC. Its earlier posts include digs at the centralized stablecoin model and place Liquity’s system as a much better alternative due to its resilience.
Anyone who has noticed the theme might have raised an eyebrow at the announcement. However, the market manipulation risk is not non-existent either, despite the April 1 announcement seeming harmless at first glance.
Authorities might not see the humor in it, though. Elon Musk is in court over his 2022 takeover of X, which used to be Twitter at the time. The prolific social media user chronicled his purchase of the platform, but some of those posts are now being recalled in class action lawsuits.
Just one day earlier, the United States Department of Justice (DOJ) extradited and indicted Gotbit executives over market manipulation charges.
So, the logic of making a joke where the punchline is a takeover that ultimately led to a price “pump and dump” is definitely questionable, even though it is on brand with Liquity’s aggressiveness in proclaiming itself as a better alternative to Circle in the stablecoin space.
How did markets react to the Circle takeover news?
While most understood the joke, the accompanying rise to $0.2935 from $0.2713 says otherwise. The April 1 stunt triggered immediate price action, suggesting that attention, even when rooted in humor, can lead to short-term market action.
Additionally, Liquity’s stunt and recent spike emphasize the trend in the crypto ecosystem, where viral posts, memes, and tweets are able to influence price action and control markets.
This further raises questions on how quickly markets react to headlines, regardless of how ambiguous or misleading they might be, all because of the fear of missing out (FOMO).
Liquity is back to trading at $0.2774 after almost touching $0.3 at the height of the Circle takeover bit. The token also saw a 165% spike in trading volume to almost $10.5 million, reflecting the action that followed the April Fool’s Day post.
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Source: https://www.cryptopolitan.com/liquity-spike-circle-april-fools-joke/