Hamster Kombat meltdown continues, token hits record low

Telegram’s popular win-win game Hamster Kombat is struggling as its token continues to fall to new lows.

Hamster Kombat (HMSTR) token is down 70% from its all-time high of $0.0132 to $0.0039. Its floating market cap fell to $253 million, while its fully diluted valuation fell to $394 million.

The token’s sales came even after Binance received listings from some of the largest centralized exchanges in the industry, including top exchanges such as OKX, Bybit and Bitget.

The decline coincided with the decline of other win-win tokens. Notcoin (NOT), the largest coin token, initially rose to $0.029 in June but later fell 74% to $0.0074.

The largest Telegram gaming token, Catizen (CATI), also fell 63% from its post-listing high. Other similar tokens such as Pixelverse and DOGS (DOGS) have all dropped over 60%.

Drop of ‘to-earn’ tokens

Historically most “earnable” tokens tend to collapse over time. For example, cryptocurrencies earned through playing, such as Decentraland, The Sandbox, and Axie Infinity, are down double digits from their all-time highs.

Platforms that move to win showed a lot of promise when they launched. At its peak, Sweatcoin was one of the most downloaded apps in the Google and Apple app stores. It had over 50 million users who accumulated tokens just by walking or running. However, its token, Sweat Economy, is down over 93% from its all-time high. StepN’s GMT also fell.

The challenge for Hamster Kombat is how to keep the community engaged as the token explodes. According to the developers, HMSTR holders who decide to keep their tokens in the game instead of withdrawing them will receive a token boost when the second season begins.

Dear CEOs,

We added the option to keep your coins in the game (check the Airdrop section).

If you decide to keep your coins instead of withdrawing them, you will be in for a (very) pleasant surprise!

Season 2 will give momentum to token holders!

Stay tuned! We… pic.twitter.com/aC1mJ8KvuH

— Hamster Kombat (@hamster_kombat) October 8, 2024

The problem with Hamster Kombat is that many tokens are still locked, meaning current holders will see significant dilution in the long run. Of the 63.3 billion tokens in circulation, 37 billion are still locked.

Token unlocking, especially without a burn mechanism, leads to dilution as more tokens are added to circulation.

The sell-off was also driven by weak sentiment in the crypto industry. Most altcoins have pulled back while Bitcoin remains between $60,000 and $62,000.

Hamster Kombat price chart | Source: TradingView

Therefore, if Bitcoin and most altcoins make a comeback, the Hamster Kombat token could make a comeback. It has also formed a falling wedge on the four-hour chart, which is a very popular bullish sign.