Kaito token rises 60% after airdrop, but risks of dilution and market volatility make $5 target uncertain - IcoHolder.
The Kaito token has defied expectations, soaring 60% following its airdrop on February 20. Unlike Pi Network, which saw a post-airdrop crash, Kaito has gained traction among investors, fueled by the launch of its staking feature offering lucrative returns. However, concerns about token dilution and long-term sustainability raise questions about whether Kaito can maintain its momentum—or reach the ambitious $5 mark.
Kaito AI, positioned as a leading crypto AI project, has outperformed recent airdrops like Wormhole and Hamster Kombat. A major driver of its rally is its staking mechanism, which boasts an impressive 53.6% APR—far higher than traditional assets like Ethereum and even U.S. government bonds. The ability to earn passive income has attracted investors, reinforcing Kaito’s market appeal.
Beyond staking, Kaito markets itself as a Web3 information platform where users earn rewards for engagement, such as posting on X (formerly Twitter). Prominent figures like Vitalik Buterin, Changpeng Zhao, and Brian Armstrong have been active on its network, further fueling its credibility in the crypto space.
Despite its early success, Kaito’s tokenomics raise red flags. Insiders control a significant share, with 25% allocated to core contributors and another 10% to the foundation. Early backers and liquidity incentives also hold a substantial portion, which could lead to heavy sell-offs once vesting periods end.
Additionally, Kaito has 241 million tokens in circulation, with a total supply of 1 billion. A major unlocking event is set for August 20, when 21.84 million tokens worth $42 million will be released. This influx of supply could dilute the token’s value, triggering price volatility.
Historical trends suggest that post-airdrop rallies are often short-lived. Several high-profile tokens, including Wormhole and EigenLayer, saw significant crashes after initial hype. Kaito’s price action also signals potential weakness, with a slanted head and shoulders pattern and a rising wedge formation—both common reversal indicators.
A short-term decline toward $0.86 appears likely, while a breakout to $5 would require a 177% surge from current levels. For this to happen, Kaito would need to break above key resistance levels at $2.1 and $2.5, a feat that remains uncertain given current market conditions.
While Kaito has captured investor interest, its long-term trajectory will depend on sustained demand, utility growth, and how it navigates upcoming token unlocks. For now, the road to $5 looks like a steep climb.
