- In August, the crypto market will witness significant token unlocks across various altcoins.
- These token unlocks could potentially lead to increased market activity and volatility.
- “Unlocking a significant amount of tokens at once has the potential to impact prices negatively,” experts suggest.
Discover what’s happening in the crypto market this August with major token unlocks and their potential effects on prices.
Major Token Unlocks Set for August
This month, several prominent projects, including Wormhole (W), Optimism (OP), ApeCoin (APE), and Aptos (APT), will release nearly $900 million worth of locked tokens into circulation. According to data from Token Unlocks, these token unlocks are set to happen between August 1 and August 31, affecting six different projects in total. The influx of tokens from these unlock events often leads to potential sell-off pressures, particularly if more than 1% of the circulating supply is released at once.
Potential Sell-Off Pressure
Releasing a substantial portion of locked tokens into the market at once can cause significant market fluctuations. For instance, when the supply surpasses 1% of the circulating tokens, it usually exerts a downward pressure on prices. The coming weeks will be crucial for W, ZETA, SAND, ApeCoin, and Optimism, with large volumes scheduled for release.
Detailed Schedule of Token Unlocks
Here is a breakdown of the notable token unlocks this month:
dYdX (DYDX): On August 4, 6.5 million tokens worth $13.9 million will be unlocked, representing 0.65% of the total supply and 3.48% of the circulating supply.
ZetaChain (ZETA): On August 12, 6.4 million tokens valued at $33.49 million will be unlocked, making up 0.45% of the total supply and 2.15% of the circulating supply.
Wormhole (W): Scheduled for August 15, 600 million tokens will be released, valued at $158 million, accounting for 0.90% of the total supply and 1.73% of circulating supply.
ApeCoin (APE): On August 17, 15.6 million tokens worth $34.8 million will enter the market. This represents 1.56% of the total supply and 4.23% of the circulating supply.
The Sandbox (SAND): On August 22, 3.4 million tokens worth $20.9 million will be unlocked, making up 1.27% of the total supply and 2.96% of the circulating supply.
Optimism (OP): On August 30, 24.1 million tokens valued at $32.1 million will be unlocked, constituting 0.56% of the total supply and 3.74% of the circulating supply.
Impact on Market Sentiment
Though market sentiment generally anticipates sell-off pressures, this isn’t always the outcome. In cases where the percentage of unlocked tokens is relatively low, the market may not react negatively. Indeed, some projects could experience price increases post-unlock. Investors and market participants will need to assess these unlock events carefully to better understand their potential impact.
Conclusion
As nearly $900 million worth of tokens are slated to be unlocked across several major projects this August, the crypto market could experience heightened volatility. While historical data suggests the potential for downward pressure on prices, the actual impact will vary depending on each project’s specific conditions and market sentiment at the time. Stakeholders should remain vigilant and informed to navigate these developments successfully.
