Toncoin Surges 24% After Telegram xAI Partnership Announcement

Toncoin, the cryptocurrency associated with the Telegram messaging app, experienced a significant surge in price following a tweet from Pavel Durov, the founder of Telegram. The price of Toncoin jumped by nearly 24% to $3.60 before settling at $3.34. This price movement was triggered by Durov's announcement of a strategic agreement between Telegram and xAI, a company associated with Elon Musk. The deal includes a $300 million investment from xAI, along with a revenue-sharing agreement where Telegram will receive half of the revenue generated by xAI subscriptions through its messaging app.

Analysts have been closely monitoring the potential impact of this partnership on the future price of Toncoin. According to one analyst's forecast, if Toncoin closes above $4.21 in the second quarter of 2025, it could reach a target price of $6.80 by the third quarter of the same year. This optimistic outlook is based on the recent intraday rise from a symmetrical triangle pattern, which has boosted investor morale despite the price eventually re-entering the symmetrical triangle range.

However, the core metrics of the TON ecosystem paint a different picture. The TON Ecosystem’s perspective dashboard from IntoTheBlock indicates stagnant adoption and declining user engagement. Despite Telegram's popularity for its mini-apps, the daily active addresses have dropped significantly by May 2025 compared to the start of the year. This decline in adoption rates is also reflected in the underperformance of TON and its mini-apps like HMSTR, NOT, and DOG. Additionally, transaction volumes for both TON and its mini-apps are on the decline.

On a positive note, the large transaction volume share of USDT rose from nearly 50% to over 80% in May, indicating some level of activity within the ecosystem. However, this increase is not sufficient to drive a recovery. The ecosystem needs a catalyst to boost interest and drive long-term adoption. The recent partnership with xAI has sparked some excitement, leading to a brief price increase. However, for any rise to be sustainable, the TON ecosystem must see improved adoption and user engagement. Otherwise, TON and its mini-app tokens may continue to decline.