This week, around $500 million worth of various tokens are set to be unlocked, potentially affecting their market dynamics. This influx of tokens will be distributed to team members, investors, and ecosystem advisors for development purposes, leading to an increase in the token supply.
Among the tokens scheduled for release are Worldcoin’s WLD, Arbitrum’s ARB, Eigenlayer’s EIGEN, and Axis Infinity’s AXS, with significant amounts being unlocked in the next seven days. For instance, Worldcoin’s WLD will see a 7% supply increase with the release of 37 million tokens.
It is important to note that the tokens being unlocked may not immediately hit the open market. However, the anticipation of investors and traders expecting token holders to sell their newly unlocked tokens can lead to a decrease in token prices before or during the unlock process.
Research suggests that significant price changes following token unlocks typically occur around two weeks after the event. This indicates that the market reaction to these unlocks may not be immediate but could impact token prices in the short to medium term.
In addition to the scheduled unlocks, Solana’s SOL will see $80 million worth of tokens unlocked as part of an ongoing linear plan. This approach involves the gradual emission and absorption of tokens by the market, potentially mitigating the immediate impact on token prices.
Overall, the unlock of tokens can have a mixed impact on token prices, depending on investor sentiment and the perceived utility of the tokens. If investors believe that the tokens will be used for staking, governance, or other utility purposes rather than immediate selling, the price may remain stable or even increase due to positive sentiment.
As the market awaits the unlock of these tokens, it will be interesting to see how investors and traders react to the increased token supply and whether the prices of these digital assets will be affected in the coming weeks.