Maker's token going through unexpected rally; luckily, reason is clear as day
Maker (MKR), the governance token of the MakerDAO and Maker Protocol, witnessed a sudden surge in price, rocketing by approximately 20%. This dramatic shift in value has been primarily attributed to the recent activities of venture capital firm Andreessen Horowitz (a16z) and CMS Holdings.
Andreessen Horowitz, which is renowned for its significant investments in a diverse range of technology companies, was seen depositing MKR to the cryptocurrency exchange Coinbase, presumably to sell. It was reported that a16z deposited 12,864 MKR, valued at around $12.6 million. The firm transferred another 6,900 MKR ($8 million) to a new address, with potential plans to deposit the tokens on an exchange. At present, a16z holds 12,396 MKR tokens worth approximately $14.4 million.
1/ The price of $MKR skyrocketed by ~20% today.We noticed that a16z has been depositing $MKR to #Coinbase to sell recently.And CMS Holdings also reduced its holdings of recently accumulated $MKR 2 hrs ago. pic.twitter.com/6AvjWf9NYh— Lookonchain (@lookonchain) July 21, 2023
Simultaneously, CMS Holdings, a private investment firm with a focus on blockchain and decentralized finance, reduced its recently accumulated MKR holdings. The firm deposited 525 MKR (valued at around $614,000) to Binance two hours before the surge. CMS Holdings had previously withdrawn 1,325 MKR ($1.54 million) from Binance and Bitget, at an average price of $793. Currently, the firm holds 800 MKR, roughly valued at $936,000.
This sudden shift in the holdings of these influential market players likely contributed to the surge in MKR's price. As large quantities of MKR were sold, the market reacted, leading to increased trading volume and an ensuing price hike.
Looking forward, this sudden increase in MKR's price can be viewed in two ways. On the one hand, the activity of large-scale investors like a16z and CMS Holdings brings additional attention to MKR, potentially attracting new buyers and causing the price to rise further. On the other hand, the decision by these entities to reduce their holdings might raise questions about the token's long-term value.