Cardano founder Charles Hoskinson has refuted an allegation that the blockchain platform could be executing a buyback program to reduce liquidity and raise the token’s dwindling price above the $1 support level, and he has threatened to sue.
In a Feb. 17 tweet, crypto investor and entrepreneur Mike Alfred claimed that Cardano could be using buybacks to keep the price above $1.03, with more than 95 percent of the buy orders on the crypto being buybacks.
A week later, the Cardano price has declined by about 25 percent and was trading at $0.77 as of this writing. It ranks No. 7 among cryptocurrencies for market capitalization at $25.9 billion, according to Coinmarketcap.
Buybacks are a popular tool to stimulate the price of tokens. When a company buys back its crypto assets, it can limit the supply and increase the token’s overall value.
The Cardano token would still be overvalued even at 50 cents, tweeted Alfred, who is the co-founder of Digital Assets Data, a company that builds software and data feeds for crypto hedge funds.
“Cardano is again hanging by a thread at $1.03. ~95 percent of buy volume is likely coming from the buyback program,” Alfred tweeted on Feb. 17.
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“This may be the single most overvalued asset on the planet at the moment. When it drops to 50 cents, it will still be 98 percent overpriced,” Alfred tweeted.
Cardano creator Hoskinson, who also co-founded Ethereum, has been critical of cryptocurrency buybacks and publicly threatened Alfred with legal action over unsubstantiated claims about a buyback program.
“There is no buyback program and if you keep lying publicly, then I’ll consider litigation. I am directly asking you to stop writing deceptive tweets intended to slander and mislead the general public,” Hoskinson tweeted in reply to Alfred.
In 2019, Hoskinson made it clear that he would rather focus on forging new partnerships than buying back tokens for the sake of short-term price appreciation.
The Cardano price has been on a downward slope since Jan. 18. The recent move has slipped below a stable support level to collect liquidity.
The price of Cardano was down 16.41 percent in the last 24 hours and down 27.07 percent in the last week.
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