Not too long ago (probably about a year), Axie Infinity underlying utility and governance token rose significantly. This was during the last bull run, where almost every coin hit all-time-highs. CryptoGames3D issued a breakdown article that covered that meteoric rise. Since that period, the token has failed to reach similar heights.
Some of these reasons have been internal. Like we discussed in an op-ed that examined where the eSports ecosystem went wrong and how it can correct its mistake. Meanwhile, some of the causes for the further drop were also external. The ultimate one being the bear market that developed into a very harsh crypto winter.
Reasons for Axie Infinity Token Rising by 40% Wiithin 24hrs
With the last few days, there has been a breath of fresh air within the DeFi space. Bitcoin led the way and rose from around $16,00 to more than $21,000 in less than a week. Despite several retests, the leading cryptocurrency seems to have found support above the $21,000 mark. Following this growth, other alt coins have also gradually grown.
Of all the tokens that have risen in value, $AXS has been one of the headliners. It rose to more than $13 within 24hrs, which is a growth of more than 39% of its value. While the current bull run seems like a good explanation for this happening, it is not the only reason.
The major announcement from Axie Infinity is that there will be a token release of the 1.8% of the total supply of $AXS. This is where things get complicated, especially in consideration of the fact that token releases often should reduce the price of cryptocurrencies. For better understanding, consider the laws of supply and value. The value of a commodity drops if the supply is more than the demand and vice versa.
So, what could be the possible reason for this spike despite the token drop? Well, most blockchain outfits often make positive announcements just before unlocks. This helps to cushion the effect of that coin and causes people to have bullish expectation. The reason is that most people buy tokens in the anticipation or hints of a major update. Add this factor to the recent bull run and everything makes perfect sense.
In the case of Axie Infinity, it remains to be seen what the good news will be. Many expect that it will be the launch of a new tournament. It may also be major changes to the ecosystem, another product release, $AXS staking or community engagements. The possibilities are endless. After all, it is a GameFi ecosystem.