Altcoins
Crypto Markets Brace for Impact: $2 Billion Altcoin Token Unlock, Imminent $11 Billion Bitcoin Distribution
- Billions of unlocked tokens could depress altcoin prices, creating selling pressure from venture capitalists.
- Bitcoin faces distributions worth $11 billion, adding uncertainty and potential market volatility.
The cryptocurrency market is at a critical juncture, with analysts predicting a potential truncation of the current bull cycle. A recent report by crypto analytics firm 10x Research, highlighted the looming threat of significant token unlocking in the cryptocurrency market. With nearly $2 billion in tokens expected to enter circulation over the next ten weeks, investors are bracing for potential downward pressure on altcoins. These unlockings, type
The report highlights the potential impact on altcoins, with the release of various tokens expected. Among them are aptos (APT), starkware (STRK), arbitrum (ARB), Immutable X’s (IMX)Avalanche (AVAX), Tokens optimism (OP), PRIME, sui (SUI), ethena (ENA), Altlayer ALT and XAI. Venture capitalists, in particular, may feel pressured to capitalize on recent gains, which could dampen the performance of tokens experiencing positive momentum.
One of the looming challenges facing the cryptocurrency market is the large volume of token unlocks expected in the coming weeks. Notably, on May 15, Aevo, a layer 2 crypto derivatives platform, is expected to release an impressive 828.93 million AEVO tokens, worth approximately $1.17 billion. Such massive unlocks and subsequent distributions to private investors could put downward pressure on altcoin prices.
Impending Market Correction and Key Token Unlock Information
Analysts at 10x Research have raised the possibility of a major correction in the cryptocurrency market. This warning stems from concerns about unexpected and persistent inflation, which could be the main trigger for a market reset. With bond market forecasts calling for fewer than three cuts and the 10-year Treasury yield rising above 4.5%, risky assets in the crypto space may soon face increased volatility.
Aside from the substantial Aevo unlock event, other token versions 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’ release of 11.31 million APT tokens worth $101.67 million on May 12 further add to the investor apprehension. These releases represent a significant portion of their respective circulating supplies, potentially amplifying market volatility.
Beyond altcoins, the cryptocurrency market faces additional pressures from impending Bitcoin distributions. About $11 billion worth of Bitcoin will be distributed to creditors of Gemini’s Earn program and the defunct Mt. Gox exchange. Analysts warn that these distributions could inject further uncertainty, contributing to what some anticipate will be a wave of “crypto FUD” (fear, uncertainty and doubt) in the months to come.
According to CNF Marketplace data, this reflects the current state of the cryptocurrency market, showing a decline of 3.4% in the last 24 hours. Bitcoin fell 2.5% to $61,500, while Ether (ETH) is down 3.6%. Bitcoin Cash (BCH) and Solana (SOL) are among the worst performers, each seeing a decline of more than 7%.