KAITO plunges to $0.55 after X's surprise InfoFi crackdown | Credit: Veronica Cestari
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Key Takeaways
X revoked API access for InfoFi apps, crippling KAITO’s post-to-earn model.
The KAITO crypto price fell 21% as traders piled into bearish positions.
Kaito is pivoting to a creator-focused platform, but downside risk remains.
Yesterday, the Information Finance (InfoFi) sector was reeling from a massive shock after X officially revoked API access for applications that reward users for posting.
KAITO, the native token of KaitoAI, bore the brunt of the news, as its price crashed by 21% since the development.
At press time, the KAITO InfoFi Ban has put the altcoin’s market value at $0.55.
The ban represents a direct existential threat to the “Post-to-Earn” model, forcing a hard reset for projects that rely on X’s social graph to distribute rewards.
But can KAITO survive this onslaught? Let’s find out.
Why the X API Ban Sent KAITO Into Freefall
X, led by Head of Product Nikita Bier, announced the decision late on Jan. 15. According to Bier, the platform would no longer tolerate “InfoFi” apps that incentivize AI-generated “slop” and reply spam.
“We will no longer allow apps that reward users for posting on X (aka “infofi”). This has led to a tremendous amount of AI slop & reply spam on the platform. We have revoked API access from these apps, so your X experience should start improving soon (once the bots realize they’re not getting paid anymore),” Bier posted.
Interestingly, this development comes weeks after a section of crypto Twitter complained about visibility.
For context, Kaito’s core engagement mechanism, Yaps, relied on the X API to track user posts and interactions.
With access revoked, the project can no longer verify engagement or distribute token rewards to its hundreds of thousands of users. However, KAITO is not the only project affected by the InfoFi ban.
Another project, LOUD, fell 16% as the total market cap of the InfoFi sector shrank by 11.5% in a single day.
Apart from that, it affected NFTs on the chain. For example, the floor price of Kaito’s Yapybaras NFT collection has plummeted by more than 50%, currently sitting near 0.21 ETH.
Meanwhile, as KAITO’s price dropped, Open Interest (OI) surged. That divergence is vital because rising OI during a price decline signals that traders are piling into new positions rather than exiting old ones.
In many cases, this points to growing short interest, as participants bet on further downside. If the price keeps falling, the added leverage can accelerate the altcoin’s losses.
However, if KAITO suddenly rebounds, those crowded shorts could be forced to cover, which may trigger a sharp short squeeze and a fast upside move. But for now, that seems unlikely.
The Pivot: Kaito Introduces Its Studio
However, in an immediate effort to contain the damage, Kaito founder Yu Hu announced a strategic pivot away from permissionless social rewards.
According to him, they received a re-evaluation email from X. He added that the development surprised him, as he had seen Bier’s announcement like everyone else, even though he had already responded to the email.
Meanwhile, Yu noted that Kaito is transitioning to a tier-based marketing platform that targets high-quality content creators.
The founder noted that the new model will expand beyond X to include integrations with YouTube and TikTok.
“For several months now, Kaito Studio was a work-in-progress that signals our expansion cross platform (tiktok, YouTube) as well as beyond crypto; complimenting Yaps with a new model. with existing partnerships with our pilot users in crypto and beyond due to launch soon,” Yu disclosed.
Previously, the altcoin had formed a rounding bottom pattern, suggesting it could extend to $1. However, as of this writing, bears have invalidated this setup.
As this happened, KAITO’s price slipped below the $0.58 support level. By the look of things, the altcoin is unlikely to trade higher anytime soon.
If that is the case, KAITO might decline to $0.47. On the contrary, if traders decide to buy the dip in large volumes, this prediction might be invalidated.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Victor Olanrewaju is a crypto analyst and reporter at CCN with deep roots in on-chain research and technical analysis. His crypto journey began in 2017, but it was the 2020 Uniswap airdrop that sparked a full-time pivot into the space.
With a foundation in copywriting, Victor honed his craft creating high-converting content for leading crypto brokers — most notably an XRP price prediction that ranked #1 on Google during the 2021 bull run.
He later joined AMBCrypto in 2022, where he combined storytelling with technical and on-chain analysis to cover key market narratives.
In 2024, he expanded his expertise at BeInCrypto, collaborating with analysts and using tools like Glassnode, Santiment, and IntoTheBlock to break down Bitcoin and altcoin trends.
At CCN, Victor covers the top cryptocurrencies, memecoins, macro shifts, blending real-time insights with deep-dive metrics.
He holds a Bachelor’s degree in Physics from the University of Ibadan, equipping him to simplify complex data for a wide audience. Follow his work or connect on LinkedIn or X.
