Arbitrum (ARB) Sustains Growth 3 Months After $120 m Airdrop

2023-07-05, 04:34

[//]:content-type-MARKDOWN-DONOT-DELETE
![](https://gimg2.gateimg.com/blog/1679447253722320711jiami.jpeg)
The Arbitrum network experienced growth over the last three months.

The ARB bulls have  maintained a critical support level at $1.10

Most institutional DAOs have been holding onto their ARB since the airdrop event.

**Keywords**: Arbitrum token, Arbitrum price, Arbitrum airdrop, ARB price, price of Arbitrum, ARB token, Arbitrum token price
## Introduction 
Arbitrum, the <a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> Layer-2  protocol's $120 million airdrop that [occurred in April](https://www.gate.io/blog_detail/1065/layer-2-project-tour-how-to-prepare-for-arbitrum-airdrop "occurred in April") was one of the most important crypto events during the first quarter of 2023 as it transitioned the blockchain into a decentralized autonomous organization.

However, it also created anxiety among ARB investors who thought that the airdrop might result in a sharp price decrease due to an increase in the Arbitrum token supply. This article assesses the impact of Arbitrum’s airdrop on the ARB token price.
## ARB on an Upward Price Trajectory
The Arbitrum token is performing better than what analysts predicted when it distributed the ARB airdrop. This is because three months [after the Arbitrum airdrop](https://www.gate.io/blog_detail/505/arbitrum-a-much-needed-solution-to-ethereum-s-inefficiencies "after the Arbitrum airdrop") the ARB has sustained network growth as its price continues to rise. 
![](https://gimg2.gateimg.com/image/article/16885315801.png)
ARB Token - Moneytimes

So far, the Arbitrum token has consolidated its position above $1 as a result of high usage traction. This is beyond what the market has anticipated. In the past most crypto projects that distributed their tokens through airdrops experienced sharp decreases in value during the immediate post-airdrop period.

However, the story is different for the [ARB token](https://www.gate.io/price/arbitrum-arb "ARB token") whose value started increasing soon after its airdrop event. The number of blockchain users also rose within the three months that followed. For example, when 90 million ARB tokens were distributed on 25 April through the airdrop event 11,312 new users joined the Arbitrum network.

According to Santiment, the number of new users on the Arbitrum network continued to increase in June. As an example, by 16 June the network had 12,451 new wallet addresses, which became another peak point. In addition, it also registered 3,252 new addresses on 18 June and a further 4,747 on 21 June. The following graph shows changes in the number of new wallet addresses between April and June.
![](https://gimg2.gateimg.com/image/article/16885316152.png)
Changes in wallet addresses on Arbitrum Network - Santiment
## Why Arbitrum Network Experienced Growth After Its Airdrop? 
The nature of the Arbitrum airdrop explains the reason why it witnessed network growth during the post-airdrop period. Most of the ARB tokens were distributed to decentralized autonomous organizations (DAOs) as airdrop.

Specifically, [Arbitrum distributed 113 ARB](https://t.co/AwCGeTIX1G "Arbitrum distributed 113 ARB") tokens to eligible DAOs including SushiSwap Treasure DAO, <a href="/id/price/gmx-gmx" target="_blank" class="blog_inner_link">GMX</a>, Dopex, <a href="/id/price/balancer-bal" target="_blank" class="blog_inner_link">Balancer</a> and Radiant. Since institutional DAOs are long term holders very few of them might have sold their tokens. Instead, they prefer to earn passive income from holding them.

Also, due to the voting process which is time consuming most institutional DAOs do not sell their tokens impulsively. Therefore, since the DAOs choose to hold their ARB tokens for long there has been a low chance of price correction in the near future. 
## ARB Investors Shows Long-term Commitment
Notably, most ARB holders have shown their willingness to hold the tokens for a long period. We derive this from the ARB Age Consumed that has been decreasing within the last three months. For example, it decreased from 4.9 billion on 31 May to 250.71 million on 21 June, a reduction of 95%.

A sharp fall in the Age Consumed indicates that the investors are holding on to their cryptocurrency for a long period. This also shows that the investors have confidence in the long-term viability and growth of the Arbitrum network.

In light of the above factors, the ARB bulls are most likely to maintain the support level at $1.10 in their bid to sustain an upward price rise. Also, the ARB Market Value to Realized Value (MVRV) ratio indicates that the investors who purchased the ARB tokens during May and June have an unrealized loss of about 3%. This means that they can only generate a profit if they sell their ARB tokens at a price of at least $1.20.

If the price of Arbitrum rises above $1.20 it may rally towards $1.35. Nevertheless, if the selling pressure increases in the near future the ARB price may fall below $1.10 which may force it to drop further towards $1. 
## Conclusion 
Three months after Arbitrum’s airdrop worth $120 million the value of the Arbitrum token remains stable to bullish in nature. The main reason is that the institutional DAOs have been holding  onto their ARB tokens. As a result of the confidence the ARB investors have in the viability and potential growth of the Arbitrum network there has been an increase in the number of new wallet addresses since April.  
## FAQs About Arbitrum
### What is the future of ARB token? 
The ARB token, which is a governance token for the Ethereum scaling solution Arbitrum, has a high prospect as it is backed by many institutional investors and will be used for developing the blockchain. Its value is likely to increase constantly over a long period. 
### Is Arbitrum crypto good investment? 
The Arbitrum crypto is a good investment asset as it is likely to gain much value over time since it is a governance token and is also used for developing the blockchain. The fact that many DAOs back it means it has high liquidity. 
### How much will Arbitrum be worth? 
The Arbitrum token is likely to range between $1.62 and $2.11 by the end of 2023. Some analysts predict that its value will fluctuate between $27.35 and $35.56 by 2030. Read also price predictions [for ABR in 2023-2030](https://www.gate.io/price-prediction/arbitrum-arb "for ABR in 2023-2030").
### What is the use case of ARB token? 
The ARB token [is a governance token for the Arbitrum blockchain](https://www.gate.io/learn/articles/a-deep-dive-into-arbitrum/487 "is a governance token for the Arbitrum blockchain"). It is also used for funding the development of the blockchain.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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