Shortly after Pi Network announced the launch of a $100 million investment fund, the platform’s token, Pi, plummeted over 25% within 24 hours, dropping to $0.85.

Pi Network Accused of Creating Hype to Boost Token Price

On May 14, Pi Network announced the launch of a $100 million investment initiative aimed at advancing the utility and adoption of its native token. Denominated in Pi and USD, the fund is set to invest in so-called innovative startups. The announcement, which was weeks in the making, helped propel Pi past the $1.50 mark for the first time since March 16.

However, immediately following the announcement, Pi tanked, dropping more than 25% in 24 hours to $0.85 at the time of writing (May 15, 2:16 a.m. EDT). As reported by Bitcoin.com News, Pi’s surge in the days leading up to the announcement briefly saw the token break into the top 20 digital assets by market capitalization.

At the time, the token’s rally was thought to be fueled by speculation that it would be listed on Binance and a Pi Network post on X promising a key ecosystem announcement. However, the token’s seemingly dismal price action following the announcement has sparked controversy, with some observers accusing the Pi Network team of deliberately hyping up the announcement.

One X user going by the name Dao World questioned the team’s decision to build up anticipation for just one announcement. The user offered his thoughts on why such a strategy might backfire in the end.

“In the crypto market, such timing and presentation can backfire, especially if they don’t meet the community’s expectations. It makes one wonder whether the Core Team lacks the ability—or perhaps doesn’t feel the need—to read the sentiment of the community,” the user stated.

According to this user, this announcement might have been better received if it had been shared differently, perhaps alongside other news or as an unexpected release. Elsewhere on X, some users seem to express anger at the Pi Network’s decision-making, while one user warned Pi would likely trend lower 24 hours after the announcement.

However, in an attempt to assuage token holders, The Times of Pinetwork, a pro-Pi Network media platform, insisted the team’s focus is on building an ecosystem, not price. Meanwhile, a post on X following the announcement said the newly launched investment fund is expected to drive innovation.

“This strategic program intends to invest in high-quality startups and companies across sectors, driving innovation and ecosystem growth. By providing early support to more innovative utility creation and real-world integration, this moment marks a pivotal step forward for Pi,” the team said.

As shown by Coingecko data on May 15, Pi’s market capitalization dropped from just over $9 billion three days earlier to approximately $6.2 billion. With this market capitalization, Pi dropped out of the top 20 and was now ranked 29th at the time of writing.