Key Takeaways
- Some altcoins and meme coins, including ACT, DEXE, HIPPO, BROCCOLI, DF, and KISHU, experienced major declines on April 1 for unclear reasons.
- Act 1: The AI Prophecy’s ACT coin suffered the biggest loss on April Fool’s Day. In under an hour, its value declined by nearly 60%, wiping $96 million off its market cap.
- The team behind ACT promised to investigate the cause of the price decline. However, analysts blamed Binance for updating its margin and leverage tiers on ACT, among other tokens. This caused many whale positions to be liquidated, leading to huge losses.
- There were also rumors that the automated market maker (AMM) platform Wintermute closed its ACT 1 contracts, which many speculated was either on purpose or due to a hack. The exchange’s CEO denied all reports.
Several altcoins and memecoins suffered a sharp sell-off on April 1, “April Fools Day”. Act 1 The AI Prophecy (ACT), a cryptocurrency project focused on developing artificial intelligence technology, experienced the biggest loss of the day, after plunging nearly 60% from $0.19 to $0.08 in under an hour. ACT shed $96 million in market cap, according to data provided by CoinMarketCap.
This sharp drop was not a single occurrence, as it was also observed across the altcoin market, with memecoins like Sudeng ($HIPPO), CZ’S Dog ($BROCOLI), Kishu Inu ($KISHU), DeXe ($DEXE), dForce (DF), and others seeing significant price declines.
Despite the altcoin shock, Bitcoin (BTC) remained unaffected, with its price remaining green throughout. The flagship cryptocurrency is trading between the $84,000 and $85,000 range.
ACT Coin Loses 60% of Its Value During April Fool’s Altcoin Massacre
The massive decline suffered by the ACT token led to the team behind it assuring the community that they are fully aware of the situation at hand and are “actively investigating and working collaboratively with all relevant parties to address the matter”. Act 1 also added in an X post that it has begun a “response plan” alongside its “trusted partners” and will provide updates as soon as possible.
However, some analysts have attributed the sudden price decline to a margin update by Binance, the world’s largest cryptocurrency exchange. According to data provided by on-chain analytics firm Lookonchain, Binance updated its leverage and margin tiers for several tokens, including ACT, on April 1. This led to massive liquidations among whales. It was the largest holders of the cryptocurrency who were affected by the change.
In an X post, Looksonchain said that when Binance updated its leverage and margin tiers on ACT, one particular whale got liquidated for $3.79 million when the token hit $0.1877. According to Binance Futures, the derivatives platform of the exchange, it made changes to the ACT token’s Tether USD pair – ACT/USDT – at 10:30 UTC. Binance noted that its update affected existing positions opened before the change, potentially leading to some positions exiting.
Did Wintermute Deliberately Crash The Altcoin Market?
The altcoin bleed also came amid speculation that global algorithmic trading platform Wintermute, which reportedly liquidated multiple altcoin positions on April Fool’s Day. Some market observers even suggested that the selling occurred due to a hack, while many expressed confusion over possible reasons for the selling.
Crypto analyst DEFI Kadic commented that market maker platforms don’t “just nuke” their books without reason. He linked it to either a hack, insolvency, or “someone getting margin called hard”.
‘Degen Arc’ speculated that Wintermute interacted with USD1, a newly launched stablecoin by Donald Trump-linked World Liberty Financial. They noted that the platform might be “de-risking” all assets that might be non-compliant or non-matching to its new brand direction as an institutional player. The analyst suggested that Wintermute held options contracts for all the altcoins that suffered a decline and had already profited from them, thereby choosing to close their positions and not caring about traders invested in them.
Wintermute co-founder and CEO Evgeny Gaevoy denied any involvement in the altcoin massacre.