Markets
Crypto Markets Brace for Impact: $2B Altcoin Token Unlocks, $11B Bitcoin Distribution Imminent
- Billions in token unlocks could drive down altcoin prices, creating selling pressure from venture capital investors.
- Bitcoin faces distributions worth $11 billion, increasing uncertainty and potential market volatility.
The cryptocurrency market is at a critical juncture, with analysts predicting a potential truncation of the ongoing bull cycle. A recent report from crypto analytics firm 10x Research highlighted the imminent threat of major token unlocks in the cryptocurrency market. With nearly $2 billion worth of tokens expected to be put into circulation over the next ten weeks, investors are bracing for potential downward pressure on altcoins. These unlocks, type
The report highlights the potential impact on altcoins, with several tokens scheduled for launch. Among them are apt (APT), starkware (STRK), arbitrum (ARB), Immutable X’s (IMX)Avalanche (AVAX), optimism (OP), PRIME, sui (SUI), ethena (ENA), Altlayer’s ALT tokens and XAI. Venture capital investors, in particular, may feel compelled to capitalize on recent gains, potentially harming the performance of tokens experiencing positive momentum.
One of the imminent challenges looming over the cryptocurrency market is the significant volume of token unlocks scheduled for the coming weeks. Notably, on May 15, Aevo, a layer-2 crypto derivatives platform, is expected to launch a whopping 828.93 million AEVO tokens, totaling approximately $1.17 billion. These massive unlocks and subsequent distributions to private investors could put downward pressure on altcoin prices.
Imminent Market Correction and Important Information on Token Unlocks
Analysts at 10x Research have been outspoken about the potential for a major correction in the cryptocurrency market. This warning stems from concerns around unexpected and persistent inflation, which could be the main trigger for a market reset. With the bond market forecast projecting less than three cuts and the 10-year Treasury yield surpassing 4.5%, risk assets in the crypto space could soon face greater volatility.
In addition to Aevo’s substantial unlock event, other token launches are also on the horizon, contributing to market uncertainty. Worldcoin’s upcoming unlocking of $39.78 million worth of WLD tokens on July 24 and Aptos’ launch of 11.31 million APT tokens valued at $101.67 million on May 12 further heighten the apprehension among investors. These unlocks represent a significant part of the respective offers in circulation, potentially amplifying market volatility.
In addition to altcoins, the cryptocurrency market faces additional pressures from imminent Bitcoin distributions. Approximately $11 billion in Bitcoin will be distributed to creditors of Gemini’s Earn program and the defunct Mt exchange. Analysts warn that these distributions could inject more uncertainty, contributing to what some anticipate as a wave of “crypto FUD” (fear, uncertainty and doubt) in the coming months.
According to data from CNF Marketplace, it reflects the current state of the cryptocurrency market, showing a drop of 3.4% in the last 24 hours. Bitcoin fell 2.5% to $61,500, while Ether (ETH) fell 3.6%. Bitcoin Cash (BCH) and Solana (SOL) are among the worst performers, each experiencing a decline of more than 7%.