- Token supply surges are outpacing demand, leading to widespread price declines.
- Projects like Taiko and Pyth show weak market absorption despite higher circulation.
- Morpho shows relative resilience, but most tokens face steep valuation pressures.
A new analysis highlights a growing concern in the altcoin market; that of several crypto projects seeing dramatic increases in token supply putting severe downward pressure on prices. In most cases, markets have struggled to absorb the new supply, with price and market cap often declining in tandem. This trend underlines a concerning mismatch between token emissions and investor demand, which is placing pressure on valuations across multiple ecosystems.
According to data from Tokenomist, several projects have seen their circulating supply surge over the past month, but this increase has, in most cases, failed to be absorbed by the market, leading to significant price declines.
Related: $81.9 Million in Token Unlocks Set for May 5-11 as ENA and SPEC Lead in Volume
Taiko and Pyth Prices Plunge as New Supply Hits the Market
Taiko (TAIKO) provides a stark example. Its circulating supply jumped by a massive 71.9% over the period. While its market cap did rise by 14.5%, it was not nearly enough to offset the flood of new tokens, resulting in a 33.4% price drop.
As of press time, Taiko is trading at $0.5613, down 1.92% over the past week. The slight 24-hour uptick of 3.82% offers little relief from the longer-term downtrend.
Similarly, Pyth Network increased its circulating supply by 58.6%, while its market cap fell 2.4%. This resulted in a steep 38.5% decline in price. It trades at $0.1188, down 8% in the last 24 hours but showing a 3.77% gain over the past week. The data suggests that despite supply-driven expectations, market traction is still lacking.
Mixed Outcomes: Morpho Weathers the Storm, Others Falter
Morpho offers a slightly more optimistic case. Its supply grew by 33.3%, but the project managed to grow its market cap by 26.2%. This helped cushion its price loss to just 5.3%, a relatively modest dip compared to others.
Morpho is priced at $1.55, though it has declined by 3.2% in the last 24 hours. Still, a 12.12% weekly gain shows signs of healthier investor sentiment.
Related: What Does FDV Tell Us About 2024’s Top Altcoins — Winners vs. Losers
On the other end, Nyan Heroes and Spectral saw negative reactions to more modest supply increases. Nyan’s market cap collapsed by 47.5%, while its price plunged 59.5%. Its current price stands at $0.004565, a clear reflection of investor retreat.
Spectral also suffered, with its market cap falling 26.6% and price tumbling 41.6%. It now trades at $0.9611, with a sharp 12.31% dip in the past day alone.
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