Pi Network sheds $18B in six months: ‘That’s basically a rug pull’

Key Takeaways

Why is Pi Network facing rug pull claims again?

It has plunged over 90%, erasing nearly $18 billion in market cap and fueling investor distrust.

What’s next for PI?

Without resolving community concerns and supply growth issues, the token could stay under pressure in the coming months.

Pi Network [PI] price has crashed over 90% since it debuted in March, renewing “rug pull” allegations. 

In March, the price shot up to $2.79 and reached about $18 billion in market cap amid FOMO after its debut. But it has slipped below $1 and dropped further to $0.26, shedding over $16 billion in market cap over the past six months. 

Source: CoinMarketCap

According to a pseudonymous crypto market commentator, Mr Spock, the 90% crash meant the project was a “rug pull.”

“Pi crashed over 90% from its highest position, that’s basically a rug pull.”

Hype and speculative interest fade

Back in May, PI faced a similar rug pull claim after the team allegedly created a $100 million venture fund amid unmet expectations and broken promises for over six years. 

The community felt that the $100 million fund, partly gained from internal revenue and mining, was diverted for external uses instead of the ecosystem. Unsurprisingly, the backlash capped the attempted rebound in May and dragged PI below $0.50. 

Despite the souring market sentiment on the altcoin, Pi Scan showed that some players were still accumulating it. 

In the past 24 hours, a Net Flow of $112.3 million was recorded, underscoring that more PI tokens flowed out of exchanges than into them, suggesting a buying spree. 

Source: Pi Scan

Derivatives data show speculative interest has collapsed

Even so, the speculative interest suggested otherwise. While there has been an improvement in Futures market demand, the overall speculative interest dropped by over 10X. 

Glassnode data showed that PI’s Open Interest (OI), or the number of opened contracts in the derivatives market, declined from nearly $120 million to about $20 million. 

Source: Glassnode

In other words, the altcoin has been under multi-month bearish pressure as the community felt sidelined by the team

The inflationary pressure also tanked the price. Since May, the PI’s circulating supply has increased by over 1 billion tokens. 

Source: Glassnode

Collectively, the unhappy PI community and distrust of the project team have left the altcoin under bearish drift. As a result, PI’s muted price action may continue for a while unless the team addresses community concerns.