Polygon (MATIC) Drops Out of Top 20 Cryptocurrencies: Why?
- MATIC experienced a 4.4% drop in a single day, causing it to fall out of the top 20 cryptocurrencies by market cap, now ranking 26th.
- The TVL in Polygon decreased from $897.83 million on August 1 to $824.06 million on August 11, indicating waning investor interest.
- The poor performance of the Spot Ethereum ETF and the better performance of other cryptocurrencies like SOL, XRP, and ADA have negatively impacted MATIC's market position.
Understanding MATIC's Recent Market Performance
Polygon (MATIC), a cryptocurrency that enables users to interact with tens of thousands of decentralized Applications (dApps) recorded a drop of 4.4% in a day. As a result, MATIC drops out of the top 20 coins by market cap, according to CoinGecko.
At the press time, MATIC price was trading at $0.4109 with $3,816,358,099 in market cap and $166,716,980 in 24-hour trading volume. Currently, Polygon is standing in 26th position in the race of market cap, with Kaspa (KAS), Uniswap (UNI), and Litecoin (LTC) surpassing the coin.
Source: CoinGecko
Furthermore, Polygon also experienced a drop in Total value locked which showcased the declining interest of investors in the particular platform. On August 1, the TVL was documented at $897.83 Million, which declined to $824.06 Million on August 11.
Why Polygon is Down Today?
Polygon’s Layer 2 blockchain scaling solution: Polygon's Layer 2 solution, which boosts Ethereum's transaction speed and reduces costs, has lost appeal due to the Spot Ethereum ETF's poor performance.
From August 5 to 9, the Ethereum spot ETF had a net inflow of $105 million, but the total weekly net outflow was $170 million. Grayscale ETF (ETHE) saw a $180 million outflow, while BlackRock (ETHA) and Fidelity (FETH) had inflows of $188 million and $44.65 million, respectively.
Better Performance of other Cryptocurrency: Apart from the failures of Spot Ethereum ETF, the outstanding performance of other cryptocurrencies like BNB (BNB), Solana (SOL), XRP (XRP), Cardano (ADA), etc. also dragged MATIC's performance in terms of market cap.
It is worth noticing that most of the successful Memecoins are running on the Solana blockchain enhancing its standing in the crypto market. Moreover, the news of ETFs, like SOL ETF, XRP ETF, and ADA ETF also boosts the coin performance.
SOL holds a market cap of $67,053,851,081, XRP recorded $31,472,881,884, and ADA has $11,782,615,572 in market cap. MATIC, alternatively recorded a market cap of $6,330,752,283 which is lower than the aforementioned coins.
Conclusion
MATIC has undergone a significant plunge, dropping 4.4% in a day and falling out of the top 20 cryptocurrencies by market cap. This decline relates to the poor performance of the spot ETH ETF and the better performance of other cryptocurrencies like SOL, XRP, and ADA. Additionally, the TVL in Polygon has decreased, indicating waning investor interest.
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