Bitcoin was lower by 2.5% to $61,500 late Wednesday, with solana and bitcoin cash each down more than 7%.
Cryptocurrencies are still stuck in a corrective phase, but a wave of supply events worth billions of dollars could further delay any meaningful recovery.
“A rapid succession of nearly $2 billion of token unlocks during the next ten weeks could lower the market for altcoins,” crypto analytics firm 10x Research noted in a Wednesday report.
Large token unlocks in crypto are usually bearish events, increasing supply by distributing assets that were previously locked up in vesting contracts to team members, organizations and early investors including venture capital firms.
Over the next two months, some $97 million of aptos (APT), $79 million of starkware (STRK), $94 million of arbitrum (ARB), $53 million of Immutable X’s (IMX), $330 million of Avalanche’s (AVAX), $64 million of optimism (OP), $28 million of PRIME, nearly $1 billion of sui (SUI), $48 million of ethena (ENA), $171 million of Altlayer’s ALT and $135 million of XAI tokens will be added to circulation, according to data compiled in the report.
“Venture capital investors might be pressured to lock in recent gains, which could cap any upside performance of tokens with positive momentum, especially those where unlocks become available,” the report said.
Not just altcoins facing selling pressure
Over $11 billion worth of bitcoin (BTC) will be distributed to creditors of crypto exchange Gemini’s Earn program and long-defunct crypto marketplace Mt. Gox, K33 Research analyst Velte Lunde warned in a Tuesday report.
Read more: Mt. Gox’s Looming $9B Payout Could Weigh on Bitcoin Prices, K33 Research Warns
“The next months are rigged to see waves of good old crypto FUD,” said Lunde, referencing the popular crypto acronym for fear, uncertainty and doubt.
Amid upcoming supply events, one market observer suggested that the FTX repayments might offer some relief.
Pending bankruptcy court approval, some $14-$16 billion of funds in U.S. dollars could be paid out to creditors, and a good chunk of that may flow back to the crypto market, said Arthur Cheong, founder and chief investment officer of DeFiance Capital.
“Expect at least $3-$5 billion of crypto-native liquidity to be injected back into the market,” Cheong said in an X post Wednesday.
Original source: https://www.coindesk.com/markets/2024/05/08/crypto-markets-under-pressure-as-2b-worth-of-altcoin-token-unlocks-and-11b-bitcoin-distribution-loom/
