Market Volatility: Spell Token Plummets 90% in an Hour, Here’s the Explanation

Updated

April 15, 2025

Gambar Market Volatility: Spell Token Plummets 90% in an Hour, Here’s the Explanation

Jakarta, Pintu News – Mantra token , a digital asset focused on tokenizing real-world assets (RWAs), experienced a drastic drop of more than 90% within an hour on Sunday. The token’s price plummeted from nearly $6 to under $0.4. The incident took the cryptocurrency market by surprise and led to much speculation about its causes and impact on the wider ecosystem.

Forced Liquidation and Lack of Transparency

Sherpas, OMies, and broader crypto community,

First off, the team and I greatly appreciate the support that we have received over the past several hours, which we believe is a testament to the strong support MANTRA has among its investors and community.

We have determined that…
— JP Mullin (🕉, 🏘️) (@jp_mullin888) April 13, 2025

The Mantra team stated that the drastic price drop was caused by “reckless liquidation.” Mantra co-founder John Patrick Mullin said that trading positions were closed suddenly without any margin calls or prior notice. This suggests an automated action by the exchange that accelerated the price drop.

This price drop came at a time when trading volumes were low, which exacerbated the impact. Data from CoinGecko shows that the price briefly touched a low of $0.37 (around Rp6,213) before recovering slightly to around $0.8 (Rp13,435). However, the price remains far from its February peak of $8.99, representing a decline of more than 90%.

Also Read: Ripple (XRP) Movement and Potential Correction: What Crypto Investors Need to Watch Out for?

Impact on Projects and Investors

Mantra is a Layer 1 blockchain network built with the Cosmos SDK and promotes interoperability and regulatory compliance. Despite having partnerships with major entities such as Google Cloud and Dubai’s DAMAC Group, this incident created great pressure on the project’s reputation.

Kronos Research CEO, Hank Huang, highlighted that incidents like this can shake investor confidence in real-world asset tokenization projects. He added that this incident is an important reminder that the infrastructure of the RWA sector is still in its infancy and needs to be improved in terms of security and transparency.

No Evidence of Rug Pull

The Mantra team denied allegations that this incident was a rug pull or a fraudulent token sale by an internal party. They claim that the team’s token allocation remains locked and can be verified through the blockchain. Additionally, data from Arkham Intelligence shows that as many as 21 million OM tokens were burned in multiple transactions on April 2, indicating an effort to keep the supply stable.

However, concerns remain about how too much discretionary power on exchanges can lead to market imbalances. Mullin cautions that without adequate internal and external oversight, such price dislocations will continue to occur to the detriment of many.

Downward Trend of Other Tokens and Systemic Issues

Mantra is not the only project under pressure. Raydium token also plummeted 22% due to rumors that the Pump.fun platform will launch its own automated trading system. The price drops of these tokens highlight the trend of high volatility in the crypto market and add to the uncertainty for investors.

According to analysts, this event emphasizes the need for stronger regulation and standards in the cryptocurrency sector, especially for tokens linked to real-world assets. This kind of incident provides a lesson that technology alone is not enough without a strong governance framework.

Conclusion

The incident of Mantra’s (OM) token price collapsing in a short period of time is an important reminder of the high risks in crypto investments. While blockchain technology and asset tokenization offer great potential, investor protection and strong oversight systems remain top priorities. As the crypto market continues to grow, stability and trust will be key determinants of the success of future projects.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Trading crypto carries high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying andselling Bitcoin and other crypto asset investments are the responsibility of the reader.

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