Gotbit dumps WATER tokens following debut on DEXs

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As an experienced financial analyst, I believe that Gotbit’s actions in selling $4 million worth of WATER tokens after its debut on decentralized exchanges intensified the token’s price drop and caused significant concern among investors. The allegations from blockchain researchers at Lookonchain that wallets associated with the WaterCoin team were also selling large quantities of WATER only added fuel to the fire.

The cryptocurrency market maker Gotbit faced criticism following the sale of approximately $4 million in WATER tokens, an action that significantly contributed to the token’s subsequent 70% price decrease.

Russian trader Alexey Andryunin’s market making firm Gotbit was revealed as a key player in the sudden 70% plunge of WaterCoin (WATER) following its introduction on decentralized trading platforms.

As a researcher, I’ve come across some intriguing activity within the WaterCoin ecosystem. Specifically, I’ve observed that one of the developers transferred a large amount, 844.44 million $WATER, to 11 wallets that hadn’t previously participated in the pre-sale.

— Lookonchain (@lookonchain) June 24, 2024

On June 24th, a post on the X platform by Lookonchain’s blockchain researchers claimed that wallets linked to the WaterCoin team abruptly sold large quantities of WATER tokens once trading commenced on decentralized markets.

Concerns have arisen among on-chain observers regarding the sale of $WATER tokens by the team. A significant portion of these transactions, however, were carried out by Gotbit for market making purposes. It’s important to understand why such sales took place and how Gotbit intends to utilize the approximate $4 million in earnings derived from these transactions.

— Gotbit Hedge Fund (@gotbit_io) June 27, 2024

In a blog post on June 27th, Gotbit acknowledged selling WATER tokens when their price dropped. They mentioned making a profit of $4 million during this process, which they referred to as market-making activities. Gotbit attempted to explain the sudden price increase of WATER by suggesting several independent buyers had rapidly purchased large quantities of the tokens.

“Certain individuals suffered financially as a result of Gotbit’s aggressive sales. The funds obtained from these strategic buyers were then employed to boost the market price by roughly twice the presale value for a period of 2-3 days.”

Gotbit

In a subsequent post, Gotbit changed course, explaining that their function as a market maker was to ensure “fair access for all presale investors.” Consequently, they promptly adjusted the price to a reasonable level.

If the sizeable group of WATER token buyers unknowingly purchased at a value exceeding 1 billion dollars prior to the presale distribution, they could have incurred a substantial loss of around 90% afterwards. To shield the community from such potential financial harm, we adjusted the price downward to a more equitable level.

Gotbit

Previously under scrutiny for inflating trade volumes on cryptocurrency platforms as Gotbit, the company now states they have transitioned to “boosting prices and offering liquidity to sellers” upon reaching their presale targets. They assure the public that these transactions did not negatively impact the WATER community.

Although the company has maintained that the price of WATER is unchanged, it currently sits 88% lower than its initial value on June 26th. The WaterCoin team has yet to make any public comments regarding their trading activities and seem unfazed by the market instability.

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2024-06-28 14:04