After jumping into the top 50 cryptocurrency list, the Gifto token suddenly took a nosedive. What is Gifto and what was the reason behind its rise and fall?
Overnight pump and dump is not a new phenomenon in the cryptocurrency market. Gifto (GFT), a BEP20 token on the BNB chain, turned parabolic during trading yesterday and hit an all-time high of $2. As of February 8, GFT was trading at $0.2399, a drop of more than 88% from its peak.
Such was the impact that, for a brief time, GFT entered the top 50 cryptocurrencies with a market capitalization of almost $2 billion. However, it has now fallen much lower to 210 with a market capitalization of almost $240 million.
Data from CoinMarketCap suggests that the GFT token has gained over 650% over the past seven days despite the dump. Let’s understand the whole saga, but first, let’s understand what Gifto is.
What is Gifto (GFT)
In 2017, Asia Innovative Group (AIG) launched Gifto, a Web3 solution that allows users to create, store, and gift virtual gifts as non-fungible tokens (NFTs) in the form of e-cards, PFPs, generative art, or red envelopes.
This revolutionary protocol was built to become a self-regulating, self-sufficient ecosystem that facilitates the curation, tracking, and trading of virtual giveaways across multiple content creation platforms.
Leading the team is Andy Tian, the CEO of the AIG group. Tian has a bachelor’s and master’s degree in computer science from MIT and was the general manager of Zynga China before joining Gifto.
What is causing this bomb?
Yesterday’s pump in the GFT price was quite unusual, as the token traded in a tight range of $0.01 – $0.02 for the past few months. However, yesterday GFT experienced a sudden increase in its trading volumes and it started to rise rapidly until it reached the $2 barrier.
Since the token’s inception in early 2018, GFT has never experienced such a sudden price spike until yesterday, suggesting that the whales might be on the move.
What is more interesting is that 100% of yesterday’s trading volumes occurred on XT.com, a Seychelles-based cryptocurrency exchange. Also, even now, the price of the GFT token is between $0.02 and $0.03, except on XT.com, where it is trading at $0.88.
As of February 8, the trading volume of the GFT token is around 90% on XT exchange. Gate.io has a trading volume of about 10%, while Binance Dex is completely flat.
Amid this new momentum, Bitget, a Singapore-based cryptocurrency exchange, listed GFT on its platform on February 8.
Additionally, there have been no recent project announcements regarding any project developments or milestones. The only tangible development for Gifto was a strategic investment of $2.5 million from Poolz, a cross-chain dex initial offering (IDO) platform in January.
Moving whales?
CoinCarp market data as of February 8 shows that top 100 GFT holders account for more than 99.93% of the circulating supply, suggesting that whales have complete control over this asset.
This suggests that token tokenomics is highly centralized, which could create an environment where whales easily manipulate the GFT price.
Furthermore, it could make the token more vulnerable to extreme price fluctuations and pump and dump schemes.
What are the risks ahead?
Investors in Gifto cryptocurrency could be in for a wild ride. With a relatively small market, whales can easily manipulate the price, causing wild swings.
Also, with limited exchange listings, Gifto is not as liquid as other cryptocurrencies, making it difficult to download large amounts.
This combination of factors makes investing in Gifto crypto a risky endeavor, with the potential for large losses should the price crash or the project fail. Investors should be aware of these risks before investing in Gifto cryptocurrencies.
