The native token of the Pi Network, known as PI, has plummeted approximately 73% in value just weeks after hitting an all-time high of $2.99 on February 26.
At the time of writing, Pi is trading at $0.81, edging closer to its launch price of $0.70, which occurred on February 20.
This performance falls far short of the average trend in the cryptocurrency market over the same timeframe, where altcoins corrected by an average of 6.9%. As a result, the drop in PI’s value is more than ten times deeper than that of the broader market.
The decline can be attributed to the token’s design, which allows users to mint tokens and increase supply through their interactions with various applications on the network.
A report released in December 2024 highlighted that more than 90% of token unlocks create downward pressure on prices, with these effects potentially taking up to 30 days to fully materialize.
As detailed by PiScan, the network is set to release over 102 million PI tokens in the upcoming 30 days, averaging approximately 3.4 million tokens daily. This amount represents over 1% of PI’s circulating supply.
With the current price at $0.81, this translates to a dollar supply pressure of around $82.6 million, or about $2.7 million each day.
A report from another source states that Pi Network accounts for 4% of the anticipated $2 billion in token unlocks scheduled for April.
Concerns Surrounding PI
Pi Network has faced various criticisms in the weeks leading up to and following its launch last month. Industry experts have voiced concerns that its operations bear resemblance to a multi-level marketing scheme.
The delays in rolling out the mainnet and the scant information regarding token utility have intensified worries about whether Pi can truly provide accessible and decentralized value transfer.
Recently, the CEO of Bybit highlighted a report from Chinese law enforcement that alleged Pi to be fraudulent.
This report claimed the project specifically targeted vulnerable individuals, including the elderly, by promising financial rewards, and accused the network of potentially collecting personal data from its users.
Additionally, it suggested that the project’s influence in China has directly contributed to financial losses, including the depletion of pensions.
Separately, the CEO of Moonrock Capital voiced skepticism regarding Pi’s purported fully diluted valuation of $26 billion and the assertion that 60% of its supply is already circulating.
He remarked that the project has cultivated a fervent following among non-crypto enthusiasts who promote it solely for financial gain while alleging that Pi Network operates as a “massive Ponzi scheme” that gained popularity through promises of “free money.”
Pi Responds to Allegations
In a public statement released on February 22, Pi Network dismissed the allegations and clarified its stance regarding the claims made by Chinese authorities.
The team asserted that the report referred to unauthorized third parties misrepresenting themselves as associated with Pi and emphasized that no official communication had been made to Pi Network by any authorities regarding this issue.
They reiterated their lack of affiliation with those parties and stressed their commitment to launching the project responsibly.
