The collapse of the OM$ currency associated with the MANTRA project on April 13, 2025, which saw a decline of over 90% in less than 24 hours (from about $6.3 to less than $0.50), is attributed to several potential reasons based on the available information. However, no official and conclusive cause has been announced so far, leaving room for speculation and analysis. Here are the main reasons that have been circulated:
Massive sell-offs during low liquidity:
The collapse occurred during a low liquidity Asian trading session, making the market more susceptible to volatility. Approximately $43 million worth of OM tokens were transferred to trading platforms, followed by immediate selling, which caused a sharp price drop.
The CEO of MANTRA, John Patrick Mullen, indicated that "reckless forced liquidations" by some centralized platforms during periods of low liquidity might be the main reason.
Allegations of insider manipulation:
Some investors accused the MANTRA team of manipulation, as over 90% of the currency was under the control of parties linked to the project. The deposit of 3.9 million OM tokens from a wallet associated with the team on the OKX platform raised fears of a large sale, which may have triggered panic.
There is speculation that large holders or investors began liquidating the currency at high levels (such as $9.17) before the collapse, exacerbating the decline when they disagreed on selling prices.
Increase in the total supply of the currency (inflation):
The MANTRA project announced an increase in the total supply from 888,888,888 to 1,777,777,777 coins, representing an inflation of 100%. This decision, which was approved by the project's governance, raised concerns among investors about the devaluation of the currency, which may have contributed to a loss of confidence.
Suspicions of liquidity withdrawal (Rug Pull):
Many investors compared the collapse to fraudulent activities like a "rug pull," where the currency's price is artificially inflated before liquidity is suddenly withdrawn, leading to losses for investors. These suspicions were fueled by the speed of the collapse and the absence of immediate clarification from the team.
Loss of investor confidence and panic:
The rapid collapse caused a wave of panic among investors, leading to widespread liquidation of positions on trading platforms. This panic was exacerbated by the absence of immediate official data from MANTRA, increasing speculation about the existence of technical errors, hacks, or deliberate actions.
General market factors:
The cryptocurrency market is known for its high volatility, especially in the absence of effective financial regulation. This makes currencies like OM susceptible to sudden crashes when unexpected events occur or actions are taken by major investors.
MANTRA's reaction:
MANTRA denied any direct role in the collapse and announced an internal investigation to determine the causes.
The CEO announced the permanent burn of 772,000 OM tokens (team's share) to restore confidence, while keeping 300 million tokens reserved until April 2027. He also promised a detailed report and a buyback program.
Current situation:
As of April 16, 2025, the currency experienced a partial rebound of over 30% after the announcement of token burns, but it still remained far from its previous levels. Confidence remains fragile, and investors are waiting for further clarifications.
Note:
The information is based on sources available so far, some of which may be insufficient or uncertain. Investors are advised to exercise caution and follow official updates from MANTRA. For more details, refer to the official MANTRA website or platforms like CoinMarketCap.
