Cryptocurrencies are still stuck in a corrective phase, but a wave of supply events worth billions of dollars could delay any real recovery.
“The rapid sequence of nearly $2 billion in token unlocks over the next 10 weeks could send the altcoin market plummeting,” cryptocurrency analytics firm 10x Research noted in a report released on Wednesday.
Large token unlocks in cryptocurrencies are typically bearish events, increasing supply by distributing assets previously locked in vesting contracts to team members, organizations and early investors including venture capital firms.
Over the next two months, about $97 million from aptos {{APT}}, $79 million from Starquar {{STRK}}, $94 million from Arbitrum {{ARB}}, and $53 million from Immutable X's {{IMX} }, and $330 million. From Avalanche's {{AVAX}}, $64 million from Optimism {{OP}}, $28 million from PRIME, nearly $1 billion from sui {{SUI}}, $48 million from pruning (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 may be under pressure to realize recent gains, which could limit any upside performance for tokens with positive momentum, especially those where unlocks become available,” the report said.
It's not just altcoins facing selling pressure
More than $11 billion worth of bitcoin {{BTC}} will be distributed to creditors of Gemini's Earn program for cryptocurrency exchange and long-defunct crypto marketplace Mt.Gox, K33 Research analyst Velt Lund warns in a report. Tuesday report.
Read more: K33 Research Warns Mt.Gox's Impending $9 Billion Payout Could Impact Bitcoin Prices
“The coming months will see waves of good old FUD cryptocurrencies,” Lund said, referring to the popular cryptocurrency. Encryption abbreviation For fear, uncertainty and doubt.
Amid the upcoming supply events, one market watcher noted that FTX payouts may provide some relief.
Pending bankruptcy court approval, $14 billion to $16 billion of the funds could be paid in U.S. dollars to creditors, a significant portion of which could flow into the cryptocurrency market, said Arthur Cheung, founder and chief investment officer at DeFiance Capital.
“Expect at least $3 to $5 billion of native cryptocurrency liquidity to be pumped back into the market,” Cheung said in a statement. X Share Wednesday.
Ugly business in cryptocurrencies on Wednesday
Late in the day in the US, the broad CoinDesk 20 index was down 3.4% over the past 24 hours, with Bitcoin down 2.5% to $61,500 and Ethereum {{ETH}} down 3.6%. Bitcoin Cash {{BCH}} and Solana {{SOL}} were the worst performers on the index, each falling more than 7%.