Three cryptocurrencies will unlock nearly $150 million worth of tokens, potentially flooding the market with increased supply pressure. Speculation about the outcome of such massive inflation may introduce uncertainty and increase the risks of trading these tokens.
Indeed, on October 6, Finbold gained access to the data TokenUnlocks appshowing 14 cryptocurrencies unlocking $203.48 million this week. Aptos (APT), Eigen Layer (EIGEN) and Optimism (OP) will be responsible for 72.8% of these unlocks, totaling $148.97 million.
Typically, tokens are unlocked as a result of contracts concluded during private funding rounds or public launches of the project. They represent an opportunity for early investors and participants to realize their profits, and new buyers provide exit liquidity.
Aptos (APT) unlocks nearly $100 million
Aptos in particular dominates this week’s unlocks by a wide margin, unlocking $97.26 million worth of tokens. This represents almost 50% of the over $200 million in assets that will become liquid and soon hit the market.
More precisely, the blockchain protocol created by former Meta (NASDAQ: META) engineers will release 11.31 million APT on October 11th. Tokens will be distributed between the Foundation, the community, main participants and investors.
This unlock warning comes exactly one week after Apto’s direct competitor, Sui (SUI), unlocked over $100 million worth of tokens. Finbold reported an event that raised concerns among prominent market participants, who highlighted the dynamics of exit liquidity.
In general, cryptocurrency tokens have been used to raise funds for startups and provide early investors with an easy exit to liquidity. For example, Eigen’s recent giveaway illustrates what can happen if a community doesn’t keep up the momentum.
Notably, Justin Bones believes the cryptocurrency market is “dominated by predatory venture capitalists,” as Finbold reported in June. The founder and CIO of Europe’s oldest cryptocurrency fund explained how he completely changed the rules of investing in cryptocurrencies.
“Crypto fundraising used to be democratized; anyone can participate on equal terms. The market is now dominated by predatory venture capitalists!”
— Justin Bones
So while exit liquidity is welcomed by well-capitalized institutional players who can participate in private rounds, retail investors are largely penalized by entering projects with a large number of incoming unlocks as they become exit liquidity.
