The pseudonymous host of popular crypto YouTube channel Coin Bureau is updating his outlook on layer-2 scaling platform Polygon (MATIC).
In a new video, the crypto analyst known as Guy tells his two million YouTube subscribers that the circulating supply of MATIC is putting fairly significant sell pressure on Polygon that could hamper any rallies in the immediate future.
“Historical data from CoinMarketCap suggests that MATIC’s circulating supply has increased by around 600 million over the last four months. CoinGecko’s historical data suggests MATIC’s circulating supply hasn’t changed at all, but this is very unlikely given MATIC’s vesting schedule.
As it so happens, the vesting contract for the Polygon Foundation released 600 million MATIC during the same period, and I know this because of the images I have from my previous video about the project.
The fact that the MATIC balances of the other vesting contracts have barely changed, or even stayed the same, suggests that most of the sell pressure is coming from the Polygon Foundation.”
Guy says that the heavy spending of MATIC on the part of Polygon’s development team to fund acquisitions and operation could impact the price of the crypto asset.
“Speculations that the Polygon Foundation selling is suppressing MATIC’s price recently made the crypto headlines, and it makes sense if you do the maths.
Last August, the Polygon Foundation allocated $1 billion worth of MATIC from its treasury to fund the development of zero-knowledge technologies. The Polygon Foundation also paid up to 250 million MATIC for its acquisition of Hermes Network.
Polygon’s aforementioned purchase of Mir Protocol reportedly cost up to 250 million MATIC, and even Polygon’s $450 million raise was actually an over-the-counter sale of MATIC to various crypto VCs.
I couldn’t find any specific reference to vesting schedule for this $450 million in MATIC, so one has to assume they’re unlocked.
Assuming Messari’s vesting schedule for MATIC is correct, all of this accounts for most, if not all, the MATIC that has been vested to the Polygon Foundation so far, and I imagine the remainder has been spent on operating costs or other initiatives.”
Guys says that the sell pressure is painting a “grim picture” for MATIC‘s price potential in the near future, and any rallies will heavily depend on the demand and future developments on the Polygon network.
“This would be fine were it not for the fact that the demand for MATIC seems to be on the decline. As you can see, the number of new wallet addresses on Polygon’s PoS chain seems to have plateaued. What’s worse is the number of daily transactions on Polygon’s PoS chain has been on the decline for months as has the total value locked in its DeFi protocols.”
At time of writing, MATIC is worth $1.67.
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The post Coin Bureau Warns of Potential ‘Grim’ Price Potential for Polygon (MATIC) – Here’s Why appeared first on The Daily Hodl.
