What happened
It's been a wild day for cryptocurrency investors, but this time for positive reasons.
The general cryptocurrency is up 6.7% in the last 24 hours, as of 11:30 a.m. m. ET on Wednesday. Decision (CRYPTO:ARB) is among the key gainers today, moving 12.7% higher during the same time period.
This move comes as Arbitrum reported today that it has completed its airdrop of ARB tokens (worth over $120 million) to projects that were built on the network. Since this airdrop was announced on April 23, Arbitrum has underperformed, though today's earnings essentially wipe out all of the decline related to the announcement of this project.
So what
He the entire crypto sector is seeing a rise in interest today, as a way for investors to hedge against what appears to be a longer banking crisis than previously thought. First Republic (FRC -20.41%) saw its share price fall this morning after the regional bank reported that more than $100 billion in deposits left the bank during the previous quarter. Consequently, essentially any asset that is digital in nature is winning today, as investors look for ways to diversify their portfolios and hedge against specific risks.
However, Arbitrum's huge profit suggests there is more to the story. The project's massive $120 million airdrop was a cause for concern for many investors.
Much of this had to do with previous proposals, which would have allocated a significant portion of this airdrop to Arbitrum's own treasury. And specific projects had suggested they would liquidate their holdings in Arbitrum once the airdrop took place, something that drew ire from the community but also kept some investors on the sidelines.
However, with the airdrop out of the way, and what appears to be less than expected selling pressure on this token, investors appear to be taking a breather.
Now what
Arbitrum is a key scaling solution for the Ethereal (ETH 0.00%) network, enabling faster and cheaper transactions on the world's largest network decentralized finance block chain. Consequently, this is a relatively early-stage digital currency that has sparked interest among many in the crypto community, as a result of its impressive adoption thus far.
However, concerns about the airdrop of this project have certainly put Arbitrum off the air in recent weeks. With this headwind out of the way, it seems many see Arbitrum as a way to play momentum-driven moves in this space and see outsized gains.
I'll keep an eye on this project to see how it works from here. But suffice it to say that today's move is certainly impressive and not what I expected to see with Arbitrum.
