Can the buyback strategy, which dances on the knife's edge, withstand the torrent of selling pressure?
As an old veteran who has been crawling through the crypto market for many years, I have been observing an interesting phenomenon lately: some project teams are desperately buying back tokens in an attempt to stabilize the price before a massive unlocking. This reminds me of the old story in traditional financial markets where Apple spent over 700 billion USD to buy back its stock over the past decade.
But the gameplay in the crypto market seems to be more exciting and more naked.
How long can the buyback flag be held up?
Recently, there has been a project (let's call it token X) that has spent 40 to 50 million USD on token buybacks for 10 consecutive days starting from the 2nd of this month, trying to pin the price near 0.9 USD. This situation resembles building a defensive dike on the beach, waiting for the moment the tsunami arrives.
To be honest, this kind of operation is not new in the circle. For example, the decentralized exchange Hyperliquid directly uses over 90% of its revenue to repurchase its own token HYPE, which once reduced the circulation by about 9%; while the meme coin platform Pump.fun even uses 100% of its daily revenue to repurchase PUMP.
This 'income equals repurchase' model can indeed create deflationary expectations and drive up the coin price in the short term.
But the problem is that the effectiveness of repurchase entirely depends on the comparison between the project's revenue fundamentals and selling pressure. Hyperliquid can play this way because it has solid trading income as a backing (in August alone, the revenue from transaction fees was $106 million).
However, many projects have unstable income themselves, or are highly dependent on the issuance heat of meme coins like Pump.fun, so the intensity of repurchase will naturally fluctuate with income.
Once revenue declines, repurchase will come to a sudden halt.
Massive unlocking: the 'stress test' of the repurchase strategy.
Project X is facing a token unlocking of 200 million tokens coming on the 15th. It is like a sword hanging over its head. Whether the demand created by the repurchase can digest the potential selling pressure brought by the unlocking is the core of the problem.
In this regard, crypto projects are much harder than traditional companies like Apple. Apple can repurchase stocks by issuing bonds without worrying about internal shareholders suddenly dumping their stocks.
But what about encryption projects? The token economic model is often set with a unlocking plan early on. When the time comes, insiders or early investors' tokens will enter the market in bulk. Hyperliquid will also face a token unlocking worth about $12 billion in November, which far exceeds its daily repurchase volume.
This is the real test of the repurchase strategy.
From the cases I've observed, the programmatic repurchase of many projects has limited effectiveness in the face of huge market fluctuations. Research has pointed out that projects like RAY and GMX have repurchased tokens worth millions of dollars, but the later value of these tokens was significantly lower than the repurchase cost price.
If the project's fundamentals are not solid enough, and there is no continuous revenue growth to support it, pure repurchase is more like catching flying knives during a downturn, consuming the project's precious cash reserves, which could have been used for technological development or ecological construction.
My personal views and operational thoughts.
So, going back to the case of Project X. The project side spent tens of millions of dollars in real money to support the market within 10 days. I can feel this determination and also acknowledge that they are very 'hardworking'. The 'defensive dam' built at $0.9 can indeed give the market some confidence on a psychological level.
However, in the face of the potential flood of 200 million tokens, I choose to temporarily believe in common sense. In the face of a huge supply shock, short-term demand stimulation is often powerless. This is not a denial of the project itself, but a respect for market laws.
Therefore, my personal strategy is: to be cautious and observe. I will not gamble on the solidity of the repurchase dam with spot holdings at this time. Once I see that the unlocking wave is effectively digested by the market, the price shows real resilience, or the project demonstrates stronger fundamentals (such as sustained revenue growth or substantial breakthroughs in ecology), then I will consider re-entering as its 'partner'.
The current crypto market is becoming more mature, and just having a repurchase narrative is not enough. Investors are starting to pay attention to deeper things: real income, sustainable business models, and how tokens can effectively capture value.
Repurchase is a good tool, but it is not a panacea. It needs to be combined with strong fundamentals to exert long-term effectiveness. Follow Xiang Ge to learn more firsthand information and accurate points about the crypto space, becoming your navigator in the crypto world, as learning is your greatest wealth!#加密市场反弹 #美联储降息 $ETH
