NYC Token Launched by Eric Adams Experiences 80% Value Drop on Launch Day

Summary: The NYC token, linked to former New York City Mayor Eric Adams, faced an 80% decline in value on its launch day. Following its introduction, suspicious liquidity movements were observed, leading to concerns among analysts. Despite initial excitement and a rapid surge in market capitalization, the token's value significantly dropped due to liquidity withdrawals and selling pressure.

Key Takeaways

The NYC token linked to Eric Adams launched with significant initial hype but saw an 80% decline in value on the same day.
Approximately $1 million from the liquidity pool remains unaccounted for, raising concerns about the transaction's transparency.
The project's announcement aimed to generate revenue for social causes, including combating antisemitism and helping children learn about blockchain.
Comparisons have been made to past failed political crypto launches, highlighting ongoing risks in politically branded cryptocurrencies.

Altcoins, Crypto

Significant Liquidity Movements Noticed Shortly After Launch

After the NYC token was launched, blockchain analytics firm Bubblemaps began tracking its on-chain activities. They reported that the token's creator moved 80 million NYC tokens to a wallet designated for providing liquidity on a decentralized exchange. Following this, analysts raised alarms about the wallet withdrawing approximately $2.43 million in USDC when the token's price was at its peak. As the token experienced a major value drop of over 50%, only $1.5 million in USDC was returned to the liquidity pool. The remaining nearly $1 million is still unaccounted for. Bubblemaps traced these transactions to wallet 9Ty4M, which was allegedly used for setting up one-sided liquidity on the Meteora platform. However, no explanations have been given regarding the timing or structure of these withdrawals.

Launch Generates Immediate Public Interest

The public launch of the NYC token attracted significant attention, especially after Eric Adams introduced it at a press conference in Times Square. During this event, he asserted that the token would fund efforts to combat antisemitism and anti-Americanism while also helping children learn about blockchain. The token is presented on its website as a representation of New York City’s principles of innovation and diversity.

Initial Surge Followed by Significant Losses

Following the announcement, investor enthusiasm led to a rapid increase in the token's market capitalization, which soared to nearly $600 million shortly after its launch, according to Solscan. However, this was short-lived as liquidity was withdrawn amid heightened selling pressure, resulting in a dramatic decline. As of the latest figures, the market cap had plummeted to around $110 million, with the token's price decreasing by over 80% from its peak.

Historical Context: Similar Political Crypto Launches

In examining the circumstances, analysts from Bubblemaps drew parallels with previous politically-associated cryptocurrencies. They specifically referenced the LIBRA cryptocurrency, which was backed by Argentina's President Javier Milei but faced a downfall last year. Data from Nansen indicated that only 14% of LIBRA investors made profits, while 86% incurred losses totaling $251 million, which resulted in asset freezes, investigations, and class-action lawsuits. Documents from U.S. courts revealed repeated patterns across several token launches, implicating Benjamin Chow, a co-founder of Meteora, in projects like LIBRA and MELANIA. Bubblemaps also indicated links between the LIBRA and MELANIA wallets, suggesting systemic issues rather than isolated incidents.

Ongoing Concerns and Lack of Clarity

Bubblemaps emphasizes that the unexplained liquidity transactions deserve further scrutiny, especially considering the project’s high visibility and political connections. As the community continues to focus on the aftermath of the NYC token's launch, this incident underscores the persistent risks associated with cryptocurrencies that are launched under political branding, where public attention can drive quick investments before crucial concerns are addressed.

Disclaimer: This content is for informational purposes only and should not be taken as financial advice. The views expressed in this article may represent the author's personal opinions and do not reflect the stance of The Crypto Basic. Readers should ensure they conduct thorough research before making investment choices. The Crypto Basic is not liable for any financial losses.