News
Cryptocurrency Markets Under Pressure As $2 Billion Altcoin Tokens Unlocked and $11 Billion Bitcoin Deployed
Cryptocurrencies are still stuck in a corrective phase, but a wave of supply events worth billions of dollars could further delay any significant recovery.
“A rapid succession of nearly $2 billion in token unlocks over the next ten weeks could lower the altcoin market,” noted crypto analytics firm 10x Research in a report on Wednesday.
Large token unlocks in cryptocurrencies are usually bearish events, which increase supply by distributing assets previously locked in vesting contracts to team members, organizations, and early investors, including venture capital firms.
Over the next two months, approximately $97 million in aptos {{APT}}, $79 million in starkware {{STRK}}, $94 million in arbitrum {{ARB}}, $53 million in Immutable X’s { {IMX}}, Avalanche’s $330 million {{AVAX}}, $64 million Optimism {{OP}}, $28 million PRIME, nearly $1 billion sui {{SUI}}, 48 million dollars ethena (ENA), according to the data collected in the report, $171 million of Altlayer ALT and $135 million of XAI tokens will be put into circulation.
“Venture capital investors may be pressured to lock in recent gains, which could limit any upside performance of tokens with positive momentum, particularly those where unlocks become available,” the report said.
It’s not just altcoins that are facing selling pressure
Over $11 billion in bitcoin {{BTC}} will be distributed to creditors of the Earn program of the Gemini cryptocurrency exchange and the long-defunct Mt. Gox cryptocurrency market, K33 Research analyst Velte Lunde warned in a Tuesday report.
To know more: Mt. Gox’s Impending $9 Billion Payment Could Weigh on Bitcoin Prices, K33 Research Warns
“The next few months are set to see waves of good old crypto FUD,” Lunde said, referring to the popular cryptographic acronym out of fear, uncertainty and doubt.
Among upcoming supply events, one market observer suggested that FTX redemptions could offer some relief.
Pending bankruptcy court approval, about $14-16 billion of U.S. dollar funds could be paid to creditors, and a good portion of it could return to the cryptocurrency market, said Arthur Cheong, founder and chief investment officer of DeFiance Capital.
“Expect at least $3-5 billion of crypto-native liquidity to be pumped back into the market,” Cheong said in a X post Wednesday.
There was some bad action in the cryptocurrency world on Wednesday
Late in the US day, the broad CoinDesk 20 index fell 3.4% over the past 24 hours, with bitcoin down 2.5% at $61,500 and ether {{ETH}} down 3.6 %. Bitcoin Cash {{BCH}} and Solana {{SOL}} were the worst performers on the index, each down more than 7%.