Investors still betting on Pi despite wild price fluctuations

At 3:00 p.m. on Feb. 20 Chien Dong in central Binh Phuoc province, a long-time Pi community member, has his eyes glued to his phone looking at every price movement and preparing to buy more tokens.

He likens his strategy to acquire Pi to casting a fishing net: multiple buy orders in quick succession at various price points.

"If the price is trending down, I wait for half an hour; if it drops even more, I stop buying because that means people are dumping," he tells VnExpress. "So let everyone dump and let the price drop, and then I start buying from the bottom. If the price stabilizes for 24 hours, that means it is recovering; that is as low as it will go."

Started in 2019 by a group of researchers at Stanford University (the U.S.), the Pi Network project garnered overwhelming attention with its promise of free mining by smartphones.

Pi network now has over 60 million users globally, 12 million of whom have completed Pi’s know your customer (KYC) requirement as of mid-2024, mainly in Vietnam, South Korea and China.

On Feb. 20 Pi became an open network and was launched on exchanges at a starting price of US$2 per token. The price has fluctuated wildly since, dropping to as low as $0.6 before rebounding to about $2 now.

Before the open network launch Pi investors expected a listing price of $500-1,000, and the $2 opening disappointed many, who sold their tokens en masse.

But many people also continue to bet on the coin and are investing even more. After six years of mining Pi, Dong was elated when it officially became an open mainnet.

The bricklayer earns VND400,000 ($15.66) per workday, but boldly invested VND34 million, some of which he borrowed from friends, to buy as many Pi tokens as possible.

Van Thanh, the administrator of a Pi community in Hanoi with nearly 3,000 members, reveals that despite the controversies and warnings, some members in his community have spent several hundreds of millions of dong to buy Pi.

His community still has a lot of trust in the project, and the number of traders continues to grow, he says.

Capitalizing on this trust, many are getting into the Pi trading game and making profits. A handful of established traders have emerged with their own regular customers in some provinces. The ticket sizes and margins vary widely, one such trader tells VnExpress, earning as much as $2,000-3,000 on a transaction or as little as VND2-3 million.

Besides, several Pi investors say the token’s mainnet launch is sufficient grounds for trust.

When Pi was a closed network, "it was just a virtual coin; there technically was no value," Minh Bao of Hanoi, a new investor says. "Now that Pi has made it onto exchanges, there is certainty. Once it is on exchanges, it is real money."

Pi Network's interface on a smartphone. Photo by Bao Lam

Chien Dong asks indignantly: "Are you telling me that the coin is fake even though it has been listed?

"We can see how the price is rising and falling, how many tokens are being bought, what is the level of interest, so clearly it is real now. That is why people are trusting the token, and people are buying and holding more."

An unidentified blockchain expert to whom VnExpress spoke says though Pi Network boasts several advantages such as accessibility, a large and loyal community and locks to prevent dumping, it also has many limitations.

"When we look at Pi’s systems, we see that many parts of it are not 100 percent automated," they point out. Bitcoin, for example, which makes a point of having no intermediary or central bank, is fully automated, and so all activities from mining to trading are all automatically processed in real time.

With Pi, all actions require multiple layers of approval, and there might be delayed or even frozen payments. All this runs counter to decentralization, which is the point of blockchain technology, the expert says.

Another drawback is the lack of transparency. Whereas with Bitcoin details of every token mined are clearly logged, "with Pi, large amounts of tokens are being sent manually to wallets to then be paid out to the community, and we have no idea who is in control of these wallets," the expert says.

Also, where other projects publicize the different uses of the total token supply, that is not the case with Pi.

The expert speculates that the exchanges that currently allow trading of Pi might not actually hold that amount of Pi, and trading volumes might be completely made up by the exchanges to drum up and feed on the FOMO (fear of missing out) of Pi holders.

"We do not know how many Pis are in circulation, how many Pis are locked, which wallets they are stored in, who has access to those wallets, what is the unlocking mechanism for these wallets."

Another risk that investing in Pi Network poses is that it has not quite proven its worth.

The expert makes an analogy with stocks that appreciate on investors’ assumption that a business will turn a profit and ultimately pay dividends. "Now I do not know how Pi plans on doing business, nor do I see anyone else building apps on Pi’s platform. So if I am winning, who is losing?"

The trust that underpins Pi Network’s rise may soon deteriorate, as will its value, as people feel "scammed by its fantastical value," the expert cautions. They note that the Pi Network team itself has not made moves to prove the project’s technical superiority.

Despite this, Bao, who had never invested in crypto before and only recently joined the Pi community, decided to spend VND4 million, a relatively small amount, on Pi to try his luck. "I am just following the fluctuations. I do not have much faith in it."

Recently Ben Zhou, CEO of crypto exchange Bybit, called Pi Network a scam and refused to list the cryptocurrency on his exchange.

In a post on X, he attached a link to a warning from Chinese police of elderly people being scammed into buying cars with Pi coins in 2023. "There are multiple other reports out there questioning the project’s legitimacy," he wrote further.

In Vietnam, crypto is yet to be legally recognized, leading to a lack of regulators or official exchanges, Van Thanh, the Pi community admin, notes. If investors are not vigilant when trading on unofficial exchanges, they might easily fall victim of fraud, he says.

According to the unidentified blockchain expert who spoke to VnExpress, users should only invest when there are more certain signals about Pi’s value.

"For example, a reputed tech company might highly appreciate the Pi platform and build applications on it."

They say this will generate revenues that eventually feed back into Pi Network. Exchanges can also publicize their official wallets on Pi Network holding Pi tokens corresponding to their trading volumes, which will be another signal of Pi’s value, they add.