PENGU, the newly-launched cryptocurrency of the Pudgy Penguins ecosystem, suffered a sharp decline in value a day after it went live.

At the time of writing, data from CoinGecko showed that the token had fallen by 57.8% within 24 hours to settle at $0.02892.

Airdrop Aftermath

The highly-anticipated airdrop launched on December 17 saw about 62.8 billion PENGU tokens distributed to millions of qualified NFT holders, traders, and team members.

However, following an initial surge that catapulted the token into the top 100 cryptocurrencies by market cap, it suffered a swift sell-off that saw its value plummet by more than 60%, falling from a high of $0.06845 to a low of $0.027.

Interestingly, the damage wasn’t limited to the cryptocurrency, with Pudgy Penguins’ NFT collection suffering a similar fate. Within a single day, it saw its floor price plunge by more than 48% to 17.1 ETH,  about $64,450, a stark contrast to its all-time high (ATH) level of 36.33 ETH.

The downtrend notwithstanding, information from CryptoSlam showed an increase in trading activity, with the collections daily sales volume skyrocketing 258% to $21.7 million. While some investors cashed out their holdings, others used the opportunity to buy the dip, with the average sale price currently sitting at 19.89 ETH.

A Pattern of Post-Airdrop Volatility

While the rapid drop in PENGU’s market value may have raised some eyebrows, the phenomenon is not particularly new, with several other cryptocurrency giveaways leading to a market frenzy.

Some observers have attributed this to an emerging trend among airdrop recipients who quickly cash out their holdings, leading to a marked price instability at the beginning of a coin’s post-distribution trading.

For example, NFT marketplace Magic Eden’s ME token and Movement Network’s MOVE also experienced similar patterns following their respective airdrops. Both of them registered sharp divestment, with ME in particular losing 80% of its value as thousands of claimants exited their positions.

However, regardless of the turbulence, PENGU still retains a market cap just shy of $2 billion, placing it at #78 among the largest cryptocurrencies in the market. Additionally, as of this writing, its price had made some marginal recoveries and was 10.5% above its lowest level recorded only hours ago.