NEM Foundation Barely Broke: Bear Market is Hitting Hard
The bear market in the cryptocurrency industry is officially one-year-old. Bitcoin and most altcoins reached their ATH (aka, All-Time High) by January 2018. Shortly after, the whole market started plunging to dive into a bear season that seems endless. This lack of the much-needed capital is starting to hit the smaller projects. The NEM Foundation—created to boost the adoption of this advanced blockchain solution—is nearly broke, according to a report.
“It’s a very big problem as we seek to sustain a viable organization in the Crypto Winter”
The New Economic Movement (NEM) project is probably facing the hardest stage since its inception. Due to the bear market and some poor decisions, the NEM Foundation is in a critical financial state right now. The new president of the foundation, Alex Tinsman, told CoinDesk that they will set a funding request to the NEM community, with the simple goal to “rescue the organisation”.
But that won’t be the only action they’ll take to save the foundation and ultimately, the project. According to the same report, they are planning “severe budget cuts and layoffs across its entire 150-person staff”. NEM is one of the most complex ecosystems in the cryptosphere. The solutions provided by NEM include a private and a public blockchain, smart contracts, smart assets system, payment gateways and more. It is not a small player: according to CoinMarketCap, XEM is the 18th coin on the market cap ranking.
Bear Market but Mismanagement too
Everything was working fine when bulls were massively buying NEM. On January 4th 2018, NEM’s price hit an ATH of 1,90 USD. In the midst of crypto euphoria, it was hard to foresee a bear market like the one we are facing today. However, NEM spent too much money, even though the bear market was an undeniable fact. Tinsman explained that their expenses between December 2017 and January 2019 (which soared to $80 million), were primarily on marketing.
Based on the scenario, the foundation is making the “right” decisions to be sustainable. In a recent post from its official forum, the foundation explains its current situation:
“The XEM exchange rate has suffered catastrophic drops from this time a year ago… Now the NEM Foundation is facing challenging budget decisions. It is our duty to act quickly to ensure the longevity of the NEM Foundation ecosystem and development.”
As a matter of fact, the NEM Foundation was nearly broke. Tinsman explained that the new council realised that they had a month left with the status quo in January. In his opinion, this was also “due to the mismanagement of the previous governance council”.
XEM Price: A Huge Drop of 98 %
Yes, Bitcoin’s situation is worrisome. But what happened to XEM (NEM’s crypto coin) is ‘catastrophe’ level. By performing a basic TA on the XEM price, we can see that the drop between the ATH value and the current one equals 98 %. That way, NEM becomes one of the most affected crypto assets in the last year. If we take a closer look at the Relative Strength Index (RSI), we can see that NEM has fallen below the oversold zone recently.
Even though the price is ready for a bounce, the drop in volume is quite significant. If NEM wants to survive, bulls need to enter firmly, breaking resistances and creating strong support levels for the digital currency.
Is NEM able to recover from this massive drop? Share your thoughts below!