Monero(XMR) could be headed for a massive price surge next week on a planned bank run by the community. The possible rise 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 $24.26 million. Given that it allows complete anonymity while transacting, the token holds a somewhat controversial position in crypto.
However, some token holders want to put this anonymity to the test in the next week by launching a supply crunch for the currency in centralized exchanges. As more XMR leaves exchanges, its price is projected to grow as a result of the resulting supply shortage.
XMR was trading at $234 on Friday. It has increased by 4% over the past week.
Some XMR holders plan a bank run
Some XMR holders plan to mass withdraw their funds from centralized exchanges on April 18, according to a post on the popular crypto subreddit r/Cryptocurrency.
Dubbed “The Monerun,” the event aims to test whether centralized exchanges are misrepresenting their XMR reserves. Community members argue there is no way to test the token’s real supply without initiating a liquidity crunch given the token’s highly anonymized nature.
Some members of the community also claimed that exchanges were pretending to sell XMR that they didn’t have. Others said that withdrawals had already been halted on some exchanges.
The Reddit post had nearly 2000 upvotes and 500 comments. According to Monero Observer, a telegram group with around 800 members is also linked with the movement.
Privacy coins a controversial subject
XMR uses decoy addresses and obscures transaction data to keep users’ identities hidden. Privacy coins, on the other hand, have drawn regulatory ire due to their role in facilitating completely anonymous transactions.
While the tokens are legal in the United States, they have been banned in countries such as Japan and South Korea due to their potential for money laundering. Some exchanges have also ceased accepting the tokens due to potential regulations against the space.