Twelve cryptocurrencies will unlock nearly $300 million worth of previously untraded inventory this week, raising concerns that selling could intensify. Among these unlocks, only three projects will bring in more than $220 million, which traders and investors should pay special attention to.
The cryptocurrency investing game has changed over the past few years, with a heavy emphasis on venture capitalists (VCs) and vesting contracts. At the same time, planned token unlocks have become increasingly important in the dynamics of this market, as they can directly put downward pressure on prices.
In the next seven days, twelve cryptocurrencies will unlock $291.59 million, of which 75% will come from three projects. Finbold received this data on September 29 from TokenUnlocks app a platform that actively monitors planned and linear unlockings.
Notably, the three most significant unlocks will occur on Sui (SUI), Optimism (OP), and ImmutableX (IMX). Each release represents 2% to 2.5% of their circulating supply, potentially flooding the market with liquidity generated by investors exiting early.
Sui to unlock over $105 million in October
First, Sui contracts on October 1 will unlock 64.20 million SUI, which is currently worth $105.28 million at $1.63. This amount represents 36% of all unlocks this week and 2.4% of Sui’s circulating supply.
According to the schedule, private investors in Series A and B will receive 39.16 million SUI worth $64.22 million. These entities will likely strategically sell unlocked vesting contracts in the coming days to realize earlier investments.
The remaining 39% of all SUI issued this week will be distributed to “early adopters”, the Mysten Labs treasury and the community reserve controlled by Mysten Labs.
Optimism (OP) and ImmutableX (IMX) will be available this week.
Next, Optimism and ImmutableX will unlock approximately $57 million each from 31.34 million OP and 32.47 million IMX.
Optimism will be the first, scheduled to unlock on September 30th, while ImmutableX will do so on October 4th. Both will distribute tokens almost equally between two subgroups each. Namely, “Major Participants” and “Investors” for optimism, as well as “Ecosystem Development” and “Project Development” for ImmutableX.
In general, cryptocurrency tokens have been used to raise funds for startups and provide early investors with an easy exit to liquidity. This is a completely different dynamic than first and second generation blockchains, which has its advantages and disadvantages.
Justin Bones, for example, 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.
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.
Traders and investors should keep a close eye on SUI, OP and IMX this week, ideally avoiding large risks during the sell-off.