The host of the popular cryptocurrency YouTube channel Coin Bureau shared his views on the layer-2 scaling platform Polygon (MATIC).
The crypto analyst known as Guy pointed to the circulating MATIC supply in a new video. The analyst said that the supply is putting quite significant selling pressure on Polygon, which could hinder any rally in the near future.
“Historical data from CoinMarketCap shows that the circulating supply of MATIC has increased by nearly 600 million in the last four months. Historical data from CoinGecko shows that MATIC’s circulating supply has not changed at all, but this is highly unlikely given MATIC’s vesting program.
Surprisingly, the vesting contract for the Polygon Foundation released 600 million MATICs during the same period, and I know this from footage I took from my previous video about the project.
In other vesting programs, MATIC balances have changed very little or even remained the same, indicating that most of the selling pressure comes from the Polygon Foundation.”
Guy noted that the heavy spending of MATIC’s development team to finance acquisitions and business could affect the price of the crypto asset.
“Speculations that the Polygon Foundation is suppressing the price of the MATIC it sells have been making the crypto headlines lately, and it makes sense if you do the math.
Last August, the Polygon Foundation allocated $1 billion worth of MATIC from its treasury to fund the development of zero information technologies. The Polygon Foundation has also paid MATIC up to 250 million for the purchase of Hermes Network.
Polygon’s aforementioned Mir Protocol acquisition reportedly cost 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 references to this $450 million vesting plan on MATIC, so I have to assume they’re unlocked.
Assuming Messari’s vesting schedule for MATIC is correct, that explains most, if not all, of the MATIC awarded to the Polygon Foundation thus far, and I assume the remainder is spent on operating costs or other initiatives.”
Guys said the selling pressure paints a “terrible picture” for MATIC’s price potential in the near future, and any rally will depend heavily on demand and future developments in the Polygon network.
“It would be nice if it weren’t for the fact that demand for MATIC is on the decline. As you can see, the number of new wallet addresses in Polygon’s PoS chain seems to be fixed. Worse still, the number of daily transactions on Polygon’s PoS chain has been declining for months.”
You can check the price movements here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.