Warning: Cryptocurrencies set to release $300 million in supply this week
A total of twelve cryptocurrencies are about to release nearly $300 million in previously non-circulating supply throughout this week, prompting concerns about potential intensified sales. Traders and investors are advised to pay special attention to three of these projects, which alone will unleash over $220 million.
The landscape of cryptocurrency investments has undergone significant changes in recent years, becoming increasingly influenced by venture capitalists (VCs) and vesting contracts. As a result, scheduled token unlocks have gained relevance in the dynamics of this market, as they can exert direct downward pressure on prices.
According to data retrieved by Finbold on September 29 from the TokenUnlocksApp platform, in the next seven days, a total of $291.59 million worth of cryptocurrency will be unlocked, with 75% of that coming from three projects. This platform actively monitors scheduled and linear unlocks.
Notably, the most significant unlocks will occur in relation to Sui (SUI), Optimism (OP), and ImmutableX (IMX). Each unlock represents between 2% and 2.5% of the respective circulating supplies, potentially injecting the market with liquidity as early investors exit their positions.
Notably, the three most significant unlocks will happen on Sui (SUI), Optimism (OP), and ImmutableX (IMX). Each unlock represents 2% to 2.5% of their circulating supply, potentially flooding the market with early investors’ exit liquidity.
Sui (SUI) is expected to unlock over $105 million in October.
On October 1, Sui contracts will unlock 64.20 million SUI, currently valued at $105.28 million, with a price of $1.63 per token. This amount represents 36% of all unlocks for the week and 2.4% of Sui’s circulating supply.
According to the schedule, Series A and B private investors will receive 39.16 million SUI, worth $64.22 million. It is likely that these entities will strategically sell the unlocked vesting contracts in the following days to realize their initial investments.
The remaining 39% of all released SUI for the week will be distributed to “Early Contributors,” the Mysten Labs Treasury, and a community reserve controlled by Mysten Labs.
Optimism (OP) and ImmutableX (IMX) have scheduled unlocks for this week.
Next, Optimism and ImmutableX will each unlock approximately $57 million worth of tokens, with 31.34 million OP for Optimism and 32.47 million IMX for ImmutableX.
Optimism is set to unlock its tokens on September 30, while ImmutableX will do so on October 4. Both projects will distribute the tokens almost equally between their respective subgroups: “Core Contributors” and “Investors” for Optimism, and “Ecosystem Development” and “Project Development” for ImmutableX.
Overall, cryptocurrency tokens have been utilized to raise funds for startups and provide early investors with a smooth exit strategy. This represents a different dynamic compared to first- and second-generation blockchains, bringing both advantages and disadvantages.
Justin Bons, for instance, believes that the crypto market is currently “dominated by predatory VCs,” as reported by Finbold in June. The founder and CIO of Europe’s oldest cryptocurrency fund explained how this has completely transformed the investment landscape for cryptocurrencies.
While the exit liquidity is welcomed by highly capitalized institutional players who can participate in private rounds, retail investors mostly suffer the consequences of entering projects with a multitude of upcoming unlocks, as they end up being the ones providing the exit liquidity.
For this week, traders and investors are strongly encouraged to closely monitor SUI, OP, and IMX, while ideally avoiding significant exposures during the sales.