Monero (XMR) could be headed for a massive price spike next week on a planned bank run by the community. The possible rally stems from a plan by some XMR holders to initiate mass withdrawals of the token from centralized exchanges.
XMR is the largest privacy coin by market capitalization, which stands at $4.26 billion. The token occupies a somewhat controversial place in crypto, given that it provides complete anonymity while transacting.
But it is this anonymity that some holders intend to test in the coming week, by initiating a supply crunch for the token in centralized exchanges. As more XMR moves off exchanges, its price is expected to rise in the ensuing supply deficit.
XMR was trading at $234 on Friday. It has gained 4% over the past week.
Some XMR holders plan bank run
According to a post on popular crypto subreddit r/Cryptocurrency, some XMR holders intend to mass withdraw their funds from centralized exchanges on April 18.
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Dubbed “The Monerun,” the event intends to test whether centralized exchanges are misrepresenting their XMR reserves. Given the token’s highly anonymized nature, community members claim there is no way to test its real supply without initiating a liquidity crunch.
Some community members also claimed that exchanges were pretending to sell XMR that they did not actually have. Others alleged some exchanges had already frozen withdrawals.
The reddit post had nearly 2000 upvotes, and 500 comments. According to Monero Observer, a telegram group with over 800 users is also associated with the movement.
Privacy coins a controversial subject
XMR uses decoy addresses and obscures transaction values to maintain anonymity of users. But given their use in facilitating entirely anonymous transactions, privacy coins have garnered some regulatory ire.
While they are legal in the United States, countries such as Japan and South Korea have banned the tokens, citing their potential use in money laundering. Some exchanges have also stopped accepting the tokens, due to potential regulation against the space.
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