As the crypto market continues with its bullish run following Donald Trump’s win in the US election, a major event is around the corner. In just about a week, the market will witness a token-unlocking event where more than $746 million worth of cryptocurrencies will be released.
The scheduled token-unlocking event on November 18 will lead to an influx of new tokens, which might cause prices to plummet, further increasing the volatility of the crypto market. This is more likely if traders’ sentiments are bearish during the event.
The developments are in full swing this week as Solana (SOL) unlocked 524,030 tokens on November 11. This $110.3 million worth of SOL tokens makes up only 0.1% of its supply, resulting in a negligible impact on its price.
Meanwhile, Worldcoin (WLD) and Aptos (APT) will release 37.2 million and 11.3 million tokens worth $84.1 million and $128.4 million respectively. While the tokens released by Aptos make up 2.2% of its supply, Worldcoin’s released tokens account for 5.9% of its supply. Hence, Worldcoin is likely to experience more price volatility if the circulating tokens don’t meet the market demand. Aptos on the other hand has a high dollar value which could expert selling pressure on the tokens. However, the limited supply of APT might temper the immediate impact of the release.
Apart from these three, the other significant token releases in the event include:
- Arbitrum (ARB) releasing 96 million tokens worth $62.2 million which is 2.4% of its supply
- Avalanche (AVAX) releasing 1.7 million tokens worth $53.9 million
- Dogecoin (DOGE) releasing 94.6 million tokens worth $27.7 million which is 0.1% of its supply, resulting in no impact on its price.
- Strike (STRK) releasing 64 million tokens worth $30.1 million which is 3.1% of its supply
- TIA releasing 7 million tokens worth $40.3 million which is 1.7% of its supply
- Sei (SEI) releasing 35.2 million tokens worth $17.2 million which is 0.9% of its supply.
Several other tokens will also be released on November 18 but the most volatile ones would be the CYBER, ZKJ and WLD as they are releasing a significant amount of their circulating supply, resulting in possible selling pressure if early holders want to secure gains.
Along with these tokens, high-profile tokens like APT, ARB and SOL which have a significant dollar value can affect the crypto market depending on the demand and the liquidity surge. The token-unlocking event is likely to draw the attention of institutional and retail investors, leading to a boost in trading activity and open interest. This happens due to the introduction of price volatility into the market by large-scale token unlocks as the supply suddenly increases causing holders to offload unlocked assets.
Prices might plummet if crypto investors indulge in “sell-the-news” behaviour as this increased liquidity exerts a selling pressure.