Renowned cryptocurrency analyst, AB Kuai Dong, has warned investors and project developers alike, predicting a drastic decline in token prices after listing on exchanges. 

In a recent tweet he made, Kuai Dong predicted that tokens might plummet by over 80% in value, a stark reality check for the crypto market.

Crypto VC Industry May Face Correction

Like every prediction made by every crypto analyst, Kuai Dong’s forecast is based on his observation of market trends and the performance of previously listed tokens. 

The analyst also noted that even projects with substantial initial offerings are not immune to this phenomenon. For instance, a project with an initial offering of $2 billion may see its value dwindle to a mere $300 million, while a project with a $700 million offering may drop below $100 million.

Meanwhile, projects valued at under $100 million might escape the upcoming downturn. This particularly concerns projects that have exercised restraint in terms of token sales, refraining from opening Token Generation Event (TGE) nodes for public purchase or conducting extensive public offerings. 

Furthermore, projects that have maintained a relatively low profile in terms of actual market circulation may also face relatively less pressure, potentially mitigating the severity of the anticipated price correction.

Token Price and Liquidity Crisis Looms 

Kuai Dong expects this trend to persist throughout the summer, leaving many investors and project developers scrambling to adapt. The analyst’s prediction serves as a cautionary tale, highlighting the inherent volatility and risks associated with the crypto market.

Kuai Dong attributes the impending price downturn to a widespread liquidity shortage crippling the crypto market. Kuai Dong pointed out that, with the notable exception of Bitcoin, the industry as a whole is grappling with insufficient liquidity. This acute shortage, coupled with the intense pressure on projects to sustain lofty valuations, has created a perfect storm that is likely to culminate in a substantial market correction.

Analysts’ predictions of a market downturn are nothing new, as similar warnings have been issued in the past. For instance, Arthur Hayes, the ex-CEO of BitMEX, predicted a “mini financial crisis” that could trigger a sharp decline in Bitcoin’s value, potentially sending it plummeting to as low as $70,000.