Recognized for its volatility, cryptocurrency has a new player in the game – the NYC Token. This memecoin, launched by ex-New York City Mayor Eric Adams, has experienced significant instability since its debut. Without a fixed issue price, it premiered between $0.15-$0.20, rapidly reaching nearly $0.70, before plummeting to roughly $0.13.
Such a drastic swing in value has sparked both criticism and analysis. Among the critics, Nansen, a crypto data and security firm, conducted an exhaustive review of the token’s on-chain data, aiming to unravel the causes of this instability.
Insights and Criticisms from Nansen
Nansen’s evaluation involved a detailed examination of the NYC Token’s on-chain data. The results raised questions about the memecoin’s integrity and highlighted potential issues that could account for its unpredictable behaviour.
Firstly, the lack of a fixed issue price at launch is a significant bone of contention. Typically, new coins come with a set issue price, giving investors a clear idea of their starting value. However, this was not the case with the NYC Token, which may have fueled its initial volatility.
Secondly, the dramatic shift in its value, from nearly $0.70 to around $0.13, is another cause for concern. Although price fluctuations are a common occurrence in the crypto market, the scale of this change is alarming. It suggests the token’s susceptibility to pump-and-dump schemes, where the value is artificially boosted before being sold off for profit.
Finally, Nansen’s findings have sparked worries about a potential ‘rug pull’. This term refers to a situation in cryptocurrency where developers abandon a project after inflating its value and selling their holdings, leaving investors with worthless coins. While this has not been confirmed for the NYC Token, its swift value drop and other concerns raised by Nansen hint at this possibility.
