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 in tokens unlocked over the next ten weeks could send the altcoin market lower,” crypto analytics firm 10x Research noted in a report released Wednesday.
Large token unlocks in crypto are typically bearish events, increasing supply by distributing assets that were previously locked in vesting contracts to team members, organizations, and early investors, including corporations venture capital.
Over the next two months, some $97 million aptos {{APT}}, $79 million starkware {{STRK}}, $94 million arbitrum {{ARB}}, $53 million from Immutable dollars of sui {{SUI}}, 48 million dollars of size (ENA), $171 million worth of ALT from Altlayer and $135 million worth of XAI tokens will be added to circulation, according to data compiled in the report.
“Venture investors may face pressure to lock in recent gains, which could limit any upside performance of tokens with positive momentum, particularly those for which unlocking becomes available,” the report said.
Altcoins aren’t the only ones facing selling pressure
More than $11 billion in bitcoin {{BTC}} will be distributed to creditors of cryptocurrency exchange Gemini’s Earn program and the long-defunct cryptocurrency market Mt. Gox, Velte Lunde, an analyst at K33 Research, in a press release. tuesday report.
Learn more: Mt. Gox’s impending $9 billion payout could weigh on Bitcoin prices, warns K33 Research
“The next few months are rigged to see waves of good old crypto FUD,” Lunde said, referring to the popular cryptographic acronym for fear, uncertainty and doubt.
Amid upcoming offering events, one market observer suggested that FTX redemptions could provide some relief.
Pending bankruptcy court approval, about $14 billion to $16 billion in U.S. dollar funds could be released to creditors, and a good portion of that could 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 a statement. X post Wednesday.
Ugly action in crypto on Wednesday
At the end of the day in the United States, the broader CoinDesk 20 index was down 3.4% over the past 24 hours, with bitcoin down 2.5% at $61,500 and ether {{ETH }} down 3.6%. Bitcoin Cash {{BCH}} and Solana {{SOL}} were the worst performers on the index, each down more than 7%.
