Spark token continued its freefall on Wednesday, June 18, a day after launching its highly anticipated airdrop.
Spark (SPK) plunged to a low of $0.0470, down 30% from its highest point a day earlier. The decline came as its 24-hour trading volume surged 80% to over $378 million, significantly higher than its market capitalization of $83 million. Its fully diluted valuation also rose.
The token crashed even as Spark’s ecosystem continued to show strength. According to DeFi Llama, the total value locked in its network jumped to a record high of over $6.66 billion, up from $6.48 billion in April.
Spark provides on-chain capital allocation services, borrowing from Sky Protocol (SKY) and allocating that capital across decentralized finance, centralized finance, and real-world assets.
It also allows users to deposit stablecoins to earn returns. According to its website, Spark’s savings TVL stands at $3.29 billion, with an average savings rate of 4.50%. The platform also enables users to borrow USDS and USDS+ against their liquid assets.
Why Spark crypto price crashed
Spark token declined despite being listed on major crypto exchanges including Binance, Coinbase, Bybit, OKX, and Bitget.
Some of these platforms are even offering incentives to attract investors. For example, OKX is offering a $100,000 reward to users who deposit USDC into the Spark USDC Savings Vault.
The token’s drop is likely tied to the ongoing crypto market downturn, which has impacted Bitcoin (BTC) and most altcoins. Popular tokens like Virtuals Protocol, Dogwifhat, and Kaspa each plunged by over 10%.
Another likely factor is the anticipated token unlocks. Spark launched with a circulating supply of 1.7 billion tokens, compared to a maximum supply of 10 billion, meaning 8.3 billion tokens are set to be released over the coming years, significantly increasing supply.
It’s typical for newly listed tokens to decline initially, as airdrop recipients begin selling. For example, ZKsync (ZK) dropped over 30% in its early days before surging to a record high.
Similarly, Berachain (BERA) fell by 43% before rebounding to a high of $9.18. This suggests Spark’s token may also recover in the coming weeks.