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Why did the price of THETA fall?

Theta Network (THETA) dropped 2% in the last 24 hours, adding to a 12% loss over the past week and a 29% decline this month. The main reasons are:

  1. Legal issues involving CEO Mitch Liu, accused of fraud and market manipulation
  2. Weak technical signals showing the coin is oversold and losing momentum
  3. Altcoin market weakness as Bitcoin gains dominance at 59.1%

Deep Dive

1. Fraud Allegations (Negative Impact)

Summary: On December 17, two former Theta executives sued CEO Mitch Liu, accusing him of artificially inflating THETA’s price through fake NFT bids, misleading partnerships (including with Katy Perry NFTs), and insider trading (Decrypt). Since its peak in 2021, THETA has lost 97% of its value.

What this means: This insider lawsuit raises serious questions about Theta Labs’ leadership and governance. The plaintiffs claim Liu controlled 43% of the TDROP token supply during a 90% price crash, increasing regulatory risks and damaging trust with partners and investors.

2. Technical Breakdown (Negative Impact)

Summary: THETA is currently trading at $0.259, below important moving averages like the 7-day average of $0.274. The Relative Strength Index (RSI) is at 22.86, indicating the coin is heavily oversold. The MACD indicator also shows bearish momentum.

What this means: Even though the coin looks oversold, it’s struggling to stay above a key support level at $0.280. Trading volume has dropped 19% to $9.67 million, showing less buyer interest. The next major support level is at $0.118, the low from 2020.

What to watch: If THETA closes above $0.28 on a daily basis, it could signal a short-term bounce.

3. Altcoin Sector Weakness (Negative Impact)

Summary: The Altcoin Season Index is at 15 out of 100, indicating it’s “Bitcoin Season.” THETA is underperforming the overall crypto market, which itself is down 1% in the last 24 hours.

What this means: Investors are moving money out of altcoins like THETA and into Bitcoin, driven by market fear (Fear & Greed Index at 28/100). THETA’s low trading volume relative to its market size (turnover ratio of 3.7%) means it’s more vulnerable to price swings.

Conclusion

THETA’s recent price drop is due to a combination of legal challenges, weak technical signals, and a broader shift away from altcoins toward Bitcoin. While upcoming technology upgrades like the EdgeCloud with NVIDIA H200 GPUs could boost THETA’s long-term potential in AI computing, legal uncertainties are currently weighing heavily on investor confidence.

Key point to watch: Developments in the California Superior Court case, including any new whistleblower statements or settlement discussions, will likely influence THETA’s next price moves.


What could affect the price of THETA?

Theta Network is currently balancing between legal challenges and technological improvements.

  1. Legal Risks – Fraud lawsuits against the CEO could hurt trust and attract regulatory attention.
  2. EdgeCloud AI Upgrade – A new NVIDIA GPU integration might increase business use of the platform.
  3. Market Conditions – Low liquidity in altcoins like THETA raises the chance of price drops.

In-Depth Look

1. Fraud Allegations (Negative Impact)

Summary:
On December 17, 2025, two former employees sued Theta Network’s CEO, Mitch Liu, accusing him of manipulating THETA’s price through fake partnerships (such as with Google and Katy Perry NFTs) and insider trading. Theta Labs denies these claims, but the lawsuits could lead to investigations by the SEC and discourage institutional investors.

What this means:

2. EdgeCloud Upgrade (Positive Impact)

Summary:
On December 16, 2025, Theta released an update to its EdgeCloud platform, adding NVIDIA H200 GPUs. This upgrade offers 2.5 times faster AI training speeds and 141GB of VRAM. Partners like Sony Europe and Syracuse University are already using the platform for decentralized streaming and AI projects.

What this means:

3. Altcoin Liquidity Crunch (Mixed Impact)

Summary:
The crypto market is showing “Extreme Fear” with a fear/greed index of 28, and Bitcoin dominates 59.1% of the market. This has caused investors to pull money from altcoins like THETA. Trading volumes and open interest in derivatives have dropped significantly, indicating weak market confidence.

What this means:

Conclusion

Theta Network’s future price depends heavily on the outcome of the fraud lawsuits and how well its EdgeCloud technology is adopted. Investors should watch for court decisions and AI usage reports expected in early 2026. The key question remains: can Theta’s technology advancements outweigh its legal and governance challenges in today’s cautious market?


What are people saying about THETA?

The Theta Network community is divided between excitement over technology and concerns about legal issues. Here’s the latest:

  1. Fraud lawsuits against CEO Mitch Liu are the main source of worry.
  2. The EdgeCloud upgrade with NVIDIA H200 GPUs is boosting confidence in Theta’s infrastructure.
  3. Debate continues over the $0.7784 support level, even though the price is near its lowest point since 2020.

Deep Dive

1. @Theta_Network: Legal Troubles Loom – Bearish

"Unstake activity is community-driven, not Theta Labs"
– @Theta_Network (272K followers · 1.3K impressions · August 1, 2025, 4:18 PM UTC)
View original post
What this means: Theta Network clarified that recent token unstaking is driven by the community, not the company. However, this hasn’t stopped concerns after lawsuits filed in December 2025 accuse CEO Mitch Liu of manipulating the token price and faking partnerships. These legal issues have overshadowed positive updates.

2. @johnmorganFL: EdgeCloud’s AI Upgrade – Bullish

"Theta EdgeCloud Hybrid now offers 141GB VRAM, 2.5x faster AI training"
– @johnmorganFL (35K followers · 2.7K impressions · July 18, 2025, 3:33 PM UTC)
View original post
What this means: The recent upgrade to Theta’s EdgeCloud platform, featuring powerful NVIDIA H200 GPUs, significantly improves AI training speed and capacity. This positions THETA as a strong player in decentralized AI and cloud computing. Partnerships with Syracuse University and Sony Europe show growing real-world use, despite the token’s price challenges.

3. CryptoNewsLand: Support Level Debate – Mixed

"THETA retests $0.7784 – a level that triggered 2,717% rallies in 2021"
– CryptoNewsLand (July 13, 2025, 9:45 PM UTC)
View original post
What this means: Technical analysts note that $0.7784 was a key support level that led to huge price gains in 2021. However, as of December 27, 2025, THETA’s price is around $0.261—66% below that level—and the Relative Strength Index (RSI) is at 29.94, indicating the token is oversold and may be due for a rebound.

Conclusion

The outlook for Theta Network (THETA) is mixed. On one hand, the company is making important advances in decentralized AI infrastructure, supported by notable partnerships and technology upgrades. On the other hand, serious fraud allegations against the CEO and weakening price support levels create uncertainty. Investors should watch for updates on the California Superior Court case and whether THETA’s price can hold above its 2020 low of $0.118.


What is the latest news about THETA?

Theta Network is facing both legal challenges and technical advancements as of December 2025. Here’s a quick summary of the latest news:

  1. Fraud Allegations (December 24, 2025) – Former employees have sued CEO Mitch Liu, accusing him of manipulating the market and faking partnerships.
  2. EdgeCloud Upgrade (December 16, 2025) – Theta Network improved its AI capabilities by integrating NVIDIA H200 GPUs, with support from Sony Europe.
  3. TDROP Whitepaper v2.0 (December 17, 2025) – The TDROP token’s purpose has shifted to focus on AI agent payments, moving 4 billion tokens to staking pools.

In-Depth Look

1. Fraud Allegations (December 24, 2025)

What happened: Two former executives at Theta Labs filed lawsuits in California against CEO Mitch Liu. They claim he was involved in “pump-and-dump” schemes—where token prices are artificially inflated and then sold off—and that he faked partnerships with big names like Google and NASA. The lawsuits also say Liu used celebrity NFTs, including those linked to Katy Perry, to create fake demand. Meanwhile, insiders allegedly sold their tokens during price spikes. Since its peak in 2021, the THETA token price has dropped 95%, now trading at about $0.26.

Why it matters: These allegations could hurt trust in Theta Network, especially among big investors and regulators. Theta Labs denies the accusations, calling the lawsuits an attempt to get a settlement.

(Yahoo Finance)

2. EdgeCloud Upgrade (December 16, 2025)

What happened: Theta Network launched EdgeCloud, a new platform that uses NVIDIA’s H200 GPUs to speed up decentralized AI tasks by 2.5 times. This upgrade offers developers a powerful 141 GB VRAM capacity and lower delays, which is important for media and business applications. Sony Europe is backing this effort, adding credibility.

Why it matters: This upgrade improves Theta’s technology and could increase its usefulness over time. The partnership with Sony Europe shows growing institutional support. However, how many developers actually use EdgeCloud will be key to its success.

(CoinMarketCap)

3. TDROP Whitepaper v2.0 (December 17, 2025)

What happened: Theta updated the TDROP token’s role. Instead of being used mainly for NFT rewards, TDROP will now be used to pay AI agents. To support this, 4 billion tokens were moved into staking pools. This change also separates TDROP (for AI payments) from TFUEL (used for transaction fees), making things clearer for users.

Why it matters: This change fits with the growing interest in AI but might upset users who liked the NFT rewards. The success of this shift depends on how well developers adopt the new system and how clearly Theta communicates these changes.

(CoinMarketCap)

Conclusion

Theta Network is at a crossroads, balancing legal troubles with technical progress. The EdgeCloud upgrade and TDROP token changes show innovation and potential growth in AI-related areas. However, the fraud allegations raise concerns about leadership and trust. The big question for 2026 is: Will Theta’s technical improvements outweigh the damage to its reputation? Keep an eye on court updates and AI usage data in early 2026 for more insight.


What is expected in the development of THETA?

Theta Network’s 2025 roadmap is focused on expanding its AI and edge computing capabilities:

  1. Hybrid Edge Cloud (First half of 2025) – Launching a beta platform for decentralized AI and video processing tasks.
  2. AI Agent Ecosystem (Second half of 2025) – Integrating crypto wallets to enable AI agents to perform autonomous transactions.
  3. Theta Hackathon (Second half of 2025) – A community event to develop new AI and video applications.
  4. Subchain Deployments (Second half of 2025) – Creating custom blockchain solutions for businesses.

Deep Dive

1. Hybrid Edge Cloud (First half of 2025)

Overview: Theta’s Hybrid Edge Cloud combines decentralized network nodes with traditional cloud services like AWS to improve AI training and video processing. It features a marketplace where users can buy and sell GPU computing power, persistent storage for AI models, and supports multiple operating systems (Linux, Windows, Mac). More than 20 universities, including George Mason University, are already using this system.

What this means: This development is positive for THETA’s usefulness as demand for decentralized AI computing grows. However, it faces competition from centralized cloud providers and depends on how quickly businesses adopt the technology.

2. AI Agent Ecosystem (Second half of 2025)

Overview: Theta plans to allow AI agents to interact directly with crypto wallets and smart contracts using TDROP tokens. According to the TDROP Whitepaper v2.0, this will enable machines to automatically pay for services like data analysis or video rendering.

What this means: This could increase the use of TDROP as a transactional token, but its success depends on developers embracing the technology. Delays or difficulties in integration could slow real-world adoption.

3. Theta Hackathon (Second half of 2025)

Overview: This developer competition focuses on building AI, video, and computing applications on Theta’s EdgeCloud platform. Previous hackathons have produced tools such as ThetaScan and Guardian Monitor.

What this means: This event could encourage innovation within the community, potentially creating new uses for Theta’s technology. However, it may not directly impact THETA’s market value unless enterprise adoption grows.

4. Subchain Deployments (Second half of 2025)

Overview: Theta will offer custom subchains—private blockchains tailored for specific business needs like tracking media rights. These subchains will use THETA tokens for consensus and TFUEL tokens for transaction fees.

What this means: This is promising for long-term business adoption. However, if these subchains don’t work well together, it could weaken the overall network’s strength.

Conclusion

Theta’s 2025 plans balance technical improvements (Hybrid Edge Cloud, AI agents) with community and business growth (hackathons, subchains). Still, recent lawsuits alleging executive misconduct (Decrypt) could overshadow these advancements if proven true. The big question is whether growing demand for decentralized AI will outweigh any reputational challenges in 2026.


What updates are there in the THETA code base?

In late 2025, Theta Network made important security improvements and started building new technology focused on artificial intelligence (AI).

  1. Guardian Node Security Patch (November 7, 2025) – Nodes automatically updated to fix issues with outdated messages and improve syncing.
  2. Validator Restaking Protocol (December 1, 2025) – 28 million THETA tokens were redistributed among validators to balance their influence.
  3. TPulse AI Subchain Vision (November 18, 2025) – Proposed a new blockchain layer to track AI activities with real-time verification.

Deep Dive

1. Guardian Node Security Patch (November 7, 2025)

Overview: Theta’s Guardian Nodes received an automatic update to version 4.1.1. This update filters out old network messages and makes block synchronization more reliable.

The update fixed memory leaks, limited overly aggressive peer connections, and improved how nodes respond to block requests. Importantly, it was designed to work smoothly without users needing to take any action.

What this means: This is positive for THETA because it lowers the chance of network downtime and makes the system more stable. Stability is especially important for decentralized video streaming and AI applications that rely on Theta. (Source)

2. Validator Restaking Protocol (December 1, 2025)

Overview: Theta moved 28 million THETA tokens from its largest validator to three others, so each now holds about 15 million THETA.

This redistribution helps prevent any single validator from having too much control, supporting Theta’s goal of a decentralized network. No new tokens were created or removed, so the total supply stayed the same.

What this means: This is a neutral update for THETA’s price but improves network security by spreading out validation power more evenly. (Source)

3. TPulse AI Subchain Vision (November 18, 2025)

Overview: Theta announced plans for TPulse, a new subchain designed specifically to track and verify AI interactions. This will help ensure data used in AI applications is accurate and trustworthy.

TPulse is built using Theta’s subchain software development kit (SDK) and will manage AI training data and user engagement metrics. It works alongside Theta EdgeCloud, which provides decentralized GPU resources.

What this means: This is a positive development for THETA because it positions the network as a key player in the growing AI economy, meeting increasing demand from businesses. (Source)

Conclusion

Theta’s updates at the end of 2025 show a clear focus on making the network more secure and expanding into AI infrastructure. The TPulse subchain could open up new opportunities for decentralized AI applications, though its success depends on how many developers adopt it. It will be interesting to see how Theta’s AI subchain competes with other specialized AI blockchains like Bittensor in 2026.