Pressure mounts on crypto markets as $2 billion worth of altcoin tokens unlock and $11 billion bitcoin distribution looms
Cryptocurrencies are currently undergoing a corrective phase, and the market may face delays in any significant recovery due to a series of upcoming supply events valued in billions of dollars.
“A rapid succession of nearly $2 billion worth of token unlocks over the next ten weeks could impact the altcoin market,” stated crypto analytics firm 10x Research in a report released on Wednesday.
Token unlocks in the crypto space are typically considered bearish events as they increase the supply by releasing assets previously held in vesting contracts to team members, organizations, early investors, including venture capital firms.
Within the next couple of months, significant amounts of various tokens such as APT ($97 million), STRK ($79 million), ARB ($94 million), IMX ($53 million), AVAX ($330 million), OP ($64 million), PRIME ($28 million), SUI ($1 billion), ENA ($48 million), ALT ($171 million), and XAI ($135 million) are expected to enter circulation as reported by 10x Research.
“Venture capital investors might feel pressured to cash in on recent profits, potentially limiting the upside of tokens with positive momentum, especially those with upcoming unlocks,” mentioned the report.
Additionally, approximately $11 billion worth of bitcoin will be distributed to creditors of Gemini’s Earn program and the now-defunct Mt. Gox crypto marketplace, warned K33 Research analyst Velte Lunde in a Tuesday report.
In anticipation of waves of negative crypto news, some market observers are hopeful that FTX repayments could provide some relief.
If approved by the bankruptcy court, creditors could receive $14-$16 billion in U.S. dollars, with a portion likely flowing back into the crypto market. Arthur Cheong, founder and CIO of DeFiance Capital, estimated that $3-$5 billion in crypto-native liquidity could re-enter the market.
At the end of the U.S. trading session, the CoinDesk 20 Index was down 3.4% in the past 24 hours, with bitcoin at $61,500 (down 2.5%) and ether at a 3.6% decrease. Bitcoin Cash and Solana were the worst performers in the index, both dropping by over 7%.
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