The price of PENGU, the newly launched governance and utility token tied to the popular NFT collection Pudgy Penguins, crashed 60% after it was listed on numerous major exchanges post-token launch.
On Tuesday, Pudgy Penguins kicked off its PENGU token on the Solana network following a Dec. 5 announcement from the team. The launch, confirmed by CEO Luca Netz, came with initial compatibility with the Ethereum network and plans for future support on Abstract Chain.
Many traders sold large amounts of tokens shortly after acquisition and capitalized on quick profits. Big falls are common with airdrops. Absent any inherent demand, these tokens move all over the place.
Airdrop Madness
Four cryptocurrency exchanges, including Binance, OKX, Bybit, and KuCoin, listed PENGU shortly after its launch. Despite the initial hype surrounding the token airdrop, PENGU saw a dramatic decline, which also affected the NFT collection.
According to data from CoinGecko, PENGU traded at around $0.068 upon being listed on exchanges. The token quickly fell to around $0.031 amid intense selling activity.
PENGU is now trading at $0.027, down over 60% in the last 24 hours.
The token’s market cap dropped from an initial $4.3 billion to around $1.6 billion as trading volume surged to $2 billion less than 12 hours of launch. This volatility was exacerbated by traders seemingly seeking quick profits, with many offloading large quantities of tokens shortly after acquiring them.
PENGU Price
Meanwhile, the floor price of Pudgy Penguins NFTs fell by over 50% over the past 24 hours, dropping from approximately 30 ETH, or around $120,000, to about 15.9 ETH shortly after the airdrop before recovering slightly to $16.4 ETH.
Ahead of the anticipated PENGU token launch, the NFT’s floor price broke through the $100,000 threshold and established a new all-time high of approximately $102,600, surpassing Bitcoin’s price of $101,000 at the time.
Last week’s achievement brought it to the top two NFT collections, just behind CryptoPunks. However, due to the recent decline, it now ranks as the fourth-largest NFT collection, outpaced by Infinex Patrons, Bored Ape Yacht Club (BAYC), and CryptoPunks.
Cashing In
The airdrop itself left mixed reactions among the Pudgy Penguins community members. Many NFT holders faced issues when trying to claim their PENGU tokens. Some users claimed they got less than the supposed amount of tokens.
Website functionality was another problem. Users reported that crypto wallets flagged the Pudgy Penguins claim website as a potential security threat. Moreover, the website experienced high traffic causing overload and potential display issues.
There were also transaction issues reported. Solana network limitations might be causing some larger claims to be split into multiple transactions, leading to confusion. All led to frustration among users and added negative sentiment to the token’s launch.
The rapid sell-off and continued price drops have raised concerns about the long-term viability of both PENGU and Pudgy Penguins NFTs, as many traders appear focused on short-term gains rather than holding.
The situation surrounding the PENGU token and its launch shares many similarities with the earlier experiences of ApeCoin (APE).
APE, the ERC-20 token launch as part of a major airdrop to holders of BAYC and Mutant Ape Yacht Club (MAYC), also experienced a steep drop from its all-time high, falling approximately 94% as investors cashed out following initial hype.
In late October, Yuga Labs announced the launch of ApeChain, an Ethereum-based Layer 3 network, designed to enhance scalability for its metaverse project, Otherside.
Following the news, APE’s price rose dramatically, closing at approximately $1.50, marking a 71% increase on the day of the launch and continuing to rise by an additional 15% shortly thereafter, according to CoinGecko data.
However, the token is still 94% away from its record high of $26.7 set over two years ago. Huge losses are possible, and happen when speculation runs wild.
