MATIC, the native token for the Polygon network continues to react differently to the market turmoil. This is coming after the coin’s price dropped to a multi-year low of $0.31 in mid-June owing to a plethora of headwinds that have rocked the crypto market in the past eight months.
The wave, which is by far one of the largest among crypto-assets has sparked a lot of interest in the layer-2 network, causing investors to flock to purchase the cryptocurrency.
Last week, Coinbase, the largest crypto exchange in the United States by trading volume rolled out Polygon support for Ethereum, MATIC, and USDC transfers. According to the announcement, the move was compelled by the need to lower the high fees that come with transacting on Ethereum as well as the need to increase cross-bridge transfers.
“Coinbase customers can convert their fiat to ETH, MATIC, and USDC and fund their Polygon wallet at a fraction of the cost and time, making it simple to explore more of web3.” The blog announcement read.
Networks built on or parallel to Ethereum such as Polygon and Solana are gaining popularity at an unprecedented rate due to their incredibly low fees and ease of transferring assets. Today, the total value locked in layer 2 protocols has surged to over 30% with $1.86B worth of assets being locked up on Polygon according to data from DeFiLamma. In October Last year, Polygon surpassed Ethereum in terms of active users, indicating that investor appetite for these protocols over Ethereum is rising.
Given that Polygon provides cheaper and faster transactions by running sidechains alongside the main Ethereum blockchain, its integration with Coinbase is likely to see more users onboarding and increased usage, giving Polygon’s MATIC a meaningful lift.
Moreover, with the ongoing crypto market sell-off, investors seem to be pivoting towards projects showing the prospects of outliving market storms. This preference has been seen in the ongoing accumulation of MATIC by investors with prices slumping. According to crypto on-chain data firm IntoTheBlock, MATIC’s price jolt was preceded by a large increase in whales’ holdings.
“The recent 9% increase in the holdings between 100M and 1B MATIC is the largest since the one seen in November of last year,” IntoTheBlock wrote last week, a day after Coinbase’s announcement.
Santiment report also revealed that MATIC ‘sharks’ and ‘whales’ have been in a pretty big accumulation trend for about six weeks. “The tier of holders ranging from 10k to 10M coins held has collectively added 8.7% more to their bags in this timespan,” Santiment wrote.
As of writing, MATIC is trading at $0.46 after a 2.90% increase on the day. That said, whereas the token has risen considerably from last month’s lows, it is still down considerably from December’s high of $2.92.