$58 Billion Token Unlocks Shake Altcoin Market
In 2024, the altcoin market has been rocked by $58 billion worth of token unlocks, creating immense selling pressure and potentially igniting a bear market.
The influx of unlocked tokens is hitting altcoins like Avalanche ($AVAX ), DYDX, and Pyth Network (PYTH) hard, contributing to significant declines.
Bitcoin's recent peak in March has overshadowed the altcoin market, which has dropped nearly 25%. This decline is driven by upcoming token unlocks, particularly those allocated to venture capitalists and founders eager to sell as the market recovers from a crypto winter.
- June Unlocks: This week, $85.5 million worth of tokens will flood the market. Optimism ( $OP ) leads with 31.34 million OP tokens worth about $56.10 million set to be released on June 30. Currently, only 26% of OP’s supply is unlocked.
Expert Insights
- Edward Chin, Parataxis Capital: Warns that publicly known unlock days can exacerbate price declines as non-VC holders try to preempt selling by VCs, leading to significant OTC market activity at steep discounts.
- Lex Sokolin, Tokenomics Expert: Notes that many infrastructure projects are launching tokens funded during the bear market, but regular buyers at high prices are scarce.
A CoinGecko study reveals that over 20% of the top 300 cryptocurrencies still have a large portion of their tokens locked. This suggests a substantial supply influx that could increase market volatility, especially for newer cryptocurrencies like Worldcoin ($WLD ) and Cheelee (CHEEL), which have the lowest float ratios.
