Token Price Suppression

Definition ∞ Token price suppression refers to deliberate actions or market dynamics that artificially hold down the price of a digital asset below its intrinsic or fair market value. This can occur through large-scale selling pressure, coordinated market manipulation, or the strategic release of significant token supplies. Such suppression can negatively impact investor confidence, reduce network security if the token is used for staking, and hinder project development. It distorts market signals and affects capital allocation.
Context ∞ News frequently covers allegations or analyses of token price suppression, particularly concerning projects with large insider holdings or venture capital vesting schedules. These discussions often involve examining market depth, trading volumes, and the distribution of token ownership. Regulatory bodies are increasingly scrutinizing such activities for potential market manipulation.