October 14 Crypto News – How the $500 Million Token Unlock Could Affect Crypto Prices
October 14 Crypto News – Approximately $500 million worth of various cryptocurrencies is set to be unlocked this week, a move that could significantly impact the market due to the increased supply of these digital assets. As tokens are released to team members, investors, and ecosystem advisors, the influx could exert downward pressure on prices for several cryptocurrencies.
Breakdown of Token Unlocks
According to data from TokenUnlocks, the distribution will include significant amounts from well-known tokens:
- Worldcoin (WLD): Over $80 million
- Arbitrum (ARB): Around $51 million
- Eigenlayer (EIGEN): Nearly $40 million
- Axis Infinity (AXS): Close to $40 million
Notably, the upcoming 37 million WLD emission represents a 7% increase in token supply. These tokens were initially subject to a three-year lock-up, which was later extended to five years in July.
Specific Token Releases and Their Impact
The anticipated unlocks include a range of tokens and their respective market values, categorized by type of release:
- Cliff Unlocks (large batches released at once):
- $ARB: $48.97 million (2.56%)
- $EIGEN: $41.40 million (6.01%)
- $AXS: $41.55 million (6.08%)
- $STRK: $25.00 million (3.30%)
- $TAIKO: $18.24 million (15.00%)
- $APE: $10.86 million (2.31%)
- $PIXEL: $6.80 million (7.05%)
- Linear Unlocks:
- Solana (SOL) will see $80 million unlocked as part of its ongoing release plan, where tokens are gradually emitted into the market.
Market Reactions and Historical Data
Unlock events often lead to increased market volatility. Historical data indicates that significant price changes may occur on average two weeks post-unlock. Anticipation of token recipients selling their newly released tokens can result in a preemptive sell-off, potentially reducing token prices before or during the unlock event.
A 2023 study by TheTie suggests that most losses related to unlocks typically arise about two weeks following the event. However, if the market perceives the unlock as a sign of progress for a project, or if the tokens are earmarked for staking governance or other non-immediate selling purposes, prices may stabilize or even increase due to positive sentiment.
FAQ
What does the term “unlock” mean in the context of cryptocurrencies?
Unlock refers to the process of releasing previously restricted tokens, allowing them to be traded or utilized in the market.
How much cryptocurrency is scheduled to unlock this week?
Approximately $500 million worth of various cryptocurrencies is scheduled to unlock this week.
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