Pi Network, the smartphone mining project boasting over 60 million users, officially launched its native PI token on Thursday, delivering a wild trading debut marked by sharp price swings. The token opened at $1.70 at 09:00 UTC, immediately attracting market attention and climbing to $2.00 within minutes, marking an 18% surge.
However, the early excitement was short-lived. Within two hours, PI experienced a steep decline, tumbling by 50% and settling at around $0.97. The dramatic price action reflected the volatile nature of recent new token launches, particularly those lacking strong liquidity support on major exchanges.
Despite the price drop, PI’s brief peak pushed its fully diluted valuation (FDV) to a staggering $195 billion — almost double the market value of Solana’s SOL at the time. This meteoric valuation raised confusion across the crypto community, given that PI is still navigating liquidity challenges and lacks widespread trading pairs.
A key issue impacting PI’s rocky debut was the apparent lack of liquidity depth. Reports indicate that exchanges like OKX showed thin order books for PI, making it easier for sharp price movements to occur with relatively low trading volumes. This lack of liquidity not only exacerbates price volatility but also poses risks for retail traders entering the market during periods of heightened speculation.
Understanding Fully Diluted Valuation and Circulating Supply
The FDV represents the total market value of a cryptocurrency, assuming all possible tokens are in circulation. In PI’s case, the maximum supply is set at 100 billion tokens, contributing to the substantial FDV. Currently, the self-reported circulating supply stands at 6.3 billion tokens, equating to a market capitalization of approximately $6.1 billion. The disparity between the FDV and the circulating supply highlights potential inflationary pressures as more tokens enter the market, which could impact the token’s price stability.
Pi Network’s approach has drawn parallels to earlier projects like SafeMoon, which utilized aggressive marketing and referral programs to rapidly expand their user base. Pi Network claims a user base of 60 million, achieved through similar strategies that incentivize early adoption and referrals.
The project, which first launched in 2019 with its testnet going live in 2020, now allows users to transfer and trade their previously accrued tokens. This milestone was highly anticipated by Pi’s community of over 60 million users, who had been mining PI through the project’s smartphone application.
Severe Liquidity Challenges Plague Exchanges
The most pressing issue facing Pi Network post-launch is a significant lack of liquidity across major exchanges. Even the most liquid trading platform, OKX, reported a 2% market depth of only $33,000 to $60,000 for PI. In practical terms, this means that even moderately sized trades — for instance, a $100,000 order — could dramatically shift the token’s price, creating an unstable and volatile market.
Market depth is a critical factor in ensuring price stability for any asset. In PI’s case, with its market cap soaring into the hundreds of millions, a 2% price move could represent a staggering $146 million fluctuation in overall project value. Such thin liquidity levels make it difficult for both retail and institutional traders to execute significant trades without impacting the market price.
Quick Facts:
- PI Token Launch: Debuted at $1.70, briefly reached $2.00, then declined to $0.97 within hours.
- Valuation Metrics: Fully diluted valuation peaked at $195 billion; current market capitalization is approximately $6.1 billion.
- Circulating Supply: Self-reported at 6.3 billion out of a maximum 100 billion tokens.
- User Base: Pi Network claims 60 million users, achieved through referral-driven growth strategies.
