Anyone who has been involved in the crypto market for a few months would be aware of the pump and dump cycles, particularly those brought on by ‘hyped announcements’. Buying a token on vague claims is hardly prudent, and investors in Einsteinium (EMC2) learnt this expensive lesson yesterday.
Earlier, in November, the team behind EMC2 had Tweeted about a “mind blowing” announcement coming on December 19. This had led to a lot of speculation and rumors – there were even talks of potential partnerships with Apple and NASA.
After ‘the announcement, about an announcement’, EMC2 saw huge volumes pouring in and had a couple of large price swings. It’s price, which was barely $0.10 in November, shot up as a high as $2.75 this month, with a total market cap over $600 million.
However, yesterday, when the announcement was due to come out, not only was there a 14-minute delay from the given time, the announcement, for many, turned out to be quite anti-climatic.
“Einsteinium Foundation has decided to change the mining algorithm of our coin to make it ASIC resistant and GPU friendly. We are in the process now of partnering with a company to create miners and the new algorithm.”
The update also mentioned partnerships with ATMs, but the damage had been done:
“We are working on partnerships with BTM companies to make EMC2 Coins available at ATMs for purchase in 2018!”
EMC2 price dropped off the chart, going down by 50%, before recovering a little, but still no where near the pre-announcement figures.
At the time of writing, ECM2 is trading at $1.55, with a market cap of just over $330 million, compared to $612 million yesterday.
The community, especially investors who believed in the hype are very sour, since the quick dump left many out of their positions, possibly losing between 50% to 30% of their investments.
In response, the EMC2 team has posted a clarification, in which they claim, the hype was all driven by the community, and that for them, changing the mining algorithm was ‘mind-blowing news’.
However, they ended the update saying, “Because of the reaction we will never be pre announcing news again.”
Earlier a similar thing happened with NEO, which went up by 50% following a Tweet, announcing an announcement. Ultimately, the news was also anti-climatic, but NEO did not suffer a drop as big as EMC2.