October is shaping to be a significant month for token unlocks, with several major projects set to release previously frozen tokens. These unlocks can substantially impact the market, affecting token prices and overall market sentiment.
Impact of Token Unlocking on Its Price
The release of tokens into circulation can significantly impact the token price. When many tokens are unlocked at once, it can flood the market and create an oversupply, leading to a drop in price. On the other hand, a slow and steady release of tokens can help maintain a stable price and prevent sudden drops in value.
Check out our blog to learn more about token unlocking and vesting schedules.
Major Token Unlocks in October
In October, the focus should be on unlocking five major tokens that had previously been frozen due to investment rounds or other fundraising programs. This approach is usually meticulously planned by the project team in order to avoid severe selling pressure and token price declines. However, variables such as liquidity shortages or profit-taking by early investors after token unlocking can significantly impact token prices.
Axie Infinity (AXS)
Unlock Date: 20th October
Axie Infinity, a popular Play-to-Earn project, will release 15.1 million AXS tokens, 11.5% of its circulating supply. This release is worth approximately $71.8 million. The tokens will be distributed to users who have locked their assets in smart contracts and to the project’s team and advisors.
The present price of the AXS token should be considered while forecasting its price momentum during the unlocking phase. Because the current price is 97% lower than its ATH, it’s conceivable that unlocking AXS tokens might not result in selling pressure.
Unlock Date: 30th October
Ethereum Layer 2 solution Optimism is set to release 24.2 million OP tokens, representing 3% of its circulating supply. The unlock is currently valued at $35.3 million. The OP token has shown resilience in the market, trading up 8% since its last unlock.
Unlock Date: October 12
After a previous unlock in September, the APT token saw a 7% increase in value. The price difference between the previous and upcoming unlock is also quite marginal. The project has also garnered partnerships with Universal Pictures for a web3 fan experience.
Immutable X (IMX)
Unlock date: October 7
A total number of 18,080,000 IMX tokens were released on October 7 which is valued at approximately $9.5 million. The tokens were mostly distributed to developers and participants from the private fundraising round. The overall impact on IMX coin can be considered negative as the price is down 7.09% on a weekly basis.
Unlock Date: October 3
Sui also faced considerable selling pressure by unlocking 34,620,000 tokens valued at $14.19 million based on the current market price. Developed by Mysten Labs, Sui has attracted the attention of leading investors, including Binance. The majority of tokens were distributed to participants of the public pre-sale. Hence, the selling pressure would have been highly anticipated. Weekly, SUI is down by 8.34%.
Market Implications and Investor Insights
Token unlocks can introduce volatility to the market. While they can lead to increased selling pressure and potential price drops, they also offer opportunities for new investors. Project teams typically strategize these unlocks to minimize adverse market impacts. As these tokens become available, investors should stay informed, conduct thorough research, and be prepared for potential market shifts.
The impact of token releases on the cryptocurrency market has been undeniable throughout October. While these announcements can potentially cause market volatility, they also provide excellent opportunities for astute traders. The secret is to learn the ins and outs of each unlock and the tactics used by different teams. Investors who are well-informed and constantly on the lookout for opportunities can profit from the market’s ups and downs. While we keep an eye on these unlocks, we recommend that you do the same: learn as much as possible, never stop asking questions, and always come to the table with a plan.