Toncoin price starts to recover following Durov's release, despite slow market

Toncoin TON +7.78% has outpaced other major cryptocurrencies over the past 24 hours, rising over 7% while Bitcoin and Ether traded flat, and the overall cryptocurrency market capitalization dipped slightly by 0.1%.

Analysts see room for further appreciation in Toncoin’s price throughout September, particularly if a potential U.S. Federal Reserve rate cut fosters a risk-on market environment.

"Toncoin's performance in September could slightly outperform the broader market, largely dependent on macroeconomic factors," Bitget Research Chief Analyst Ryan Lee said. "If market sentiment improves, Toncoin might retest the $6.50 to $7.00 levels. However, if the overall environment remains unchanged, the price is likely to fluctuate between $5.00 and $6.00."

Toncoin's price was holding just below the $7 mark until August 24, when the altcoin plummeted after Telegram founder Pavel Durov was arrested by French authorities. Although Toncoin is officially separate from Telegram, the messaging app initially developed some of its underlying technology and is strongly in support of it.

Following Durov's release on bail, Toncoin fell further, reaching a local bottom of around $4.55 at the start of August. Since then, the cryptocurrency has been gradually recovering, climbing back above the $5 mark.

Telegram's crypto-related exposure

Although Telegram has no official affiliation with Toncoin , the company's 2023 financial statement revealed significant crypto-related exposure, according to a report from the Financial Times. It said Telegram held approximately $400 million in digital assets at the end of last year, exceeding cash and cash equivalents on its balance sheet.

Presto Research analyst Min Jung highlighted some of the main aspects in a recent report. "Notably, over 40% of Telegram's 2023 revenue came from an 'integrated wallet' and 'sale of collectibles,' both involving Toncoins," Jung said.

"The company accepts Toncoins as payment for various services, including selling collectibles like usernames and virtual phone numbers. Telegram also integrated a wallet feature allowing users to manage crypto assets," Jung added.

The Presto Research analyst pointed to ecouraging signs that the company's crypto exposure does not seem to be a problem for high-profile traditional market investors. "Despite its crypto-heavy business model and substantial liabilities, Telegram has raised over $2.3 billion in convertible bonds from high-profile investors," he added.