Altcoin Selling Pressure Looms With $500M Token Unlocks This Week

This week, approximately $500 million worth of various cryptocurrencies are set to unlock, which may impact the market and lead to an increase in supply.

Key Points

The tokens expected to be released include:
The unlocked tokens will be allocated to team members and investors for the development of the ecosystem, with WLD facing a 7% increase in supply.
Historical data shows that significant price changes may occur within an average of two weeks after unlocking.

This week, nearly $500 million worth of tokens will be released to investors, teams, and ecosystem advisors, which may exert downward pressure on the prices of these digital assets.

According to TokenUnlocks, $80 million of Worldcoin, $51 million of Arbitrum, and $40 million each of Eigenlayer and Axie Infinity tokens will unlock in the next seven days.

The release of 37 million WLD tokens from Worldcoin will increase its supply by 7%. These tokens will be allocated to team members, advisors, and investors. Initially, the WLD tokens for these early contributors were planned to be released over a three-year lock-up period, but this was extended to five years in July.

The $18 million unlock of Layer 2 network Taiko will account for 15% of its total supply.

Of the total $500 million unlock, the following tokens have a market value of $200 million and will be released in a "cliff" manner, meaning a large amount of tokens will be released all at once:

$ARB (2.56%) - $48.97 million
$EIGEN (6.01%) - $41.40 million
$AXS (6.08%) - $41.55 million
$STRK (3.30%) - $25 million
$TAIKO (15.00%) - $18.24 million
$APE (2.31%) - $10.86 million
$PIXEL (7.05%) - $6.80 million

Solana's SOL will also unlock $80 million as part of its ongoing "linear" plan, and the tokens will be absorbed by the market.

Unlocking increases the total supply of specific tokens, but it does not mean they will immediately enter the public market.

Investors or traders anticipating that token recipients will sell the newly unlocked tokens may lead to preemptive sell-offs, thereby lowering token prices before or at the time of unlocking.

Research from TheTie in 2023 indicates that most losses typically occur within an average of two weeks after unlocking.

However, if the market views the unlocking as a sign of project progress, or if these tokens are expected to be used for staking governance or other purposes that do not involve immediate sale, prices may remain stable or rise due to positive sentiment.

Altcoin Selling Pressure Looms With $500M Token Unlocks This Week

Key Points

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