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Why Is Plasma Plummeting?

yyc trader & Olivia Capozzalo
October 01, 2025

Happy Uptober, Defiers!

Today’s big story:

  • In less than a week, investor sentiment surrounding Plasma’s shiny new XPL token has gone from bullish euphoria to near-panic

In other news:

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📈 Markets in the Past 24 Hours

TICKERVALUE24H
BitcoinBitcoin$116,854
3.10 %
EthereumEthereum$4,294.79
4.69 %
XRPXRP$2.93
3.46 %
BNBBNB$1,020.89
1.96 %
SolanaSolana$218.11
6.02 %

Today’s Big Story

Plasma Sentiment Sours as XPL Plunges 45%

In less than a week, investor sentiment surrounding Plasma’s shiny new XPL token has gone from bullish euphoria to near-panic after the token dropped by nearly 45% in just four days.

Plasma is a stablecoin-focused blockchain backed by Bitfinex, the sister company of USDT issuer Tether, that launched its highly anticipated mainnet and native token last Thursday.

The XPL token debuted at a $10 billion valuation, and traders piled into the latest “Tron killer,” sending it soaring above $1.6, or a $16 billion valuation, by Saturday.

By all accounts, the launch was a resounding success, with lucrative airdrops for even minor contributions to the XPL presale ensuring that there were few complaints from unhappy farmers – depositing just $1 netted participants five figures in XPL at launch.

Meanwhile, ICO participants netted a minimum 20x return on their allocations, essentially doubling their money deposited in the presale vault.

Then the selling began. Over the course of four days, XPL has plunged by nearly 45% to $0.96 at the time of writing.

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XPL price chart

As the selloff intensified, some began to speculate that the Plasma team was offloading millions of tokens through Wintermute, a prominent market-making firm.

While neither Plasma nor Wintermute have commented publicly on the matter, on-chain sleuths have confirmed the movement of large amounts of XPL to exchanges, although it remains unclear if the tokens were sold or used for legitimate purposes.

Meanwhile, Nansen data shows minimal participation from “Smart Money” wallets in XPL, while top traders and public figures have cashed out, according to another analyst. The data also shows that fresh wallets accounted for the majority of new buyers over the past week, indicating potential retail flows.

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Nansen data for Plasma

Token performance notwithstanding, Plasma has quickly established itself in DeFi, attracting nearly $6 billion in total value locked (TVL) in less than a week.

However, it’s worth noting that Plasma is currently heavily incentivizing TVL with XPL rewards, so the sustainability of its growth will likely depend on the token price in the days and weeks ahead.

yyctrader, degen in chief at The Defiant

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$100 Million DeFi DAT Chooses ETH | Ryan Zurrer

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