The Upcoming Unlock Event and Its Potential Impact on Markets
In the next seven days, approximately $500 million worth of various cryptocurrencies are scheduled for unlock, which may lead to a surge in their market due to increased supply. This significant event has garnered attention from investors, traders, and enthusiasts alike.
Tokens Set to Be Unlocked
- Worldcoin (WLD): Over $80 million will be released, representing a 7% increase in the token’s total supply.
- Arbitrum (ARB): Approximately $51 million will be unlocked.
- Eigenlayer (EIGEN): Nearly $40 million is set to be released.
- Axis Infinity (AXS): Almost $40 million in tokens will be freed.
Token Distribution
The unlocked tokens will be distributed among team members, investors, and ecosystem advisors. Initially, these contributors’ WLD tokens were intended to be subject to a three-year lock-up schedule but was later extended to a five-year schedule in July.
Taiko’s Record-Breaking Unlock
Taiko, a Layer 2 network, is set to experience the largest supply increase at 15% of its total. This significant unlock event will result in $18 million worth of tokens being released.
Weekly Cliff Unlocks
The following tokens with a market value of over $200 million will be released as part of a "cliff" – a colloquial term for a large number of tokens released simultaneously:
- ARB (2.56%): $48.97 million
- EIGEN (6.01%): $41.40 million
- AXS (6.08%): $41.55 million
- STRK (3.30%): $25.00 million
- TAIKO (15.00%): $18.24 million
- APE (2.31%): $10.86 million
- PIXEL (7.05%): $6.80 million
Historical Data and Market Anticipation
Historical data suggests that significant price changes often occur two weeks after the unlock event. Investors or traders expecting token receivers to sell their newly unlocked tokens can lead to a preemptive sell-off, reducing the token price before or as the tokens are unlocked.
Potential Price Movement
A 2023 research from TheTie found that most losses from unlocks typically arise after an average of two weeks from the event. However, if the market perceives the unlock as a sign of project progress or the tokens are expected to be used for staking governance or other utility purposes that do not involve immediate selling, the price might remain stable or increase due to positive sentiment.
Conclusion
The upcoming unlock event is a significant development in the cryptocurrency market. The release of $500 million worth of various tokens may lead to increased supply and potential price changes. It’s essential for investors and traders to stay informed about these events and adjust their strategies accordingly.
