In July 2024, the cryptocurrency market is poised for significant activity as approximately $755 million worth of tokens are scheduled for release. This major event will see over 40 crypto projects ending their vesting periods and unlocking their tokens, a move that could have substantial impacts on the market.
What is Crypto Vesting?
Crypto vesting is a mechanism designed to prevent early investors and team members from immediately selling their tokens. By locking these assets for a specified period, projects aim to avoid sudden price drops and ensure stability during their initial phases.
Biggest Token Unlocks in July
Among the notable projects, AltLayer (ALT) will release the largest share of tokens. On July 25, the decentralized protocol will unlock 684 million ALT tokens, valued at around $125 million. These tokens are allocated across various segments including the team, investors, advisors, protocol development, treasury ecosystem, and community.
Another significant release will come from the gaming-focused project Xai (XAI), which will unlock $93 million worth of tokens on July 9. Like AltLayer, these assets are designated for the team, investors, and ecosystem, with an additional $2 million allocated to reserves. Currently, ALT is priced at approximately $0.18, while XAI stands at $0.46.
Regular Token Unlocks by Key Projects
Several projects regularly schedule token unlocks, impacting their market performance. For instance, Aptos (APT) has been unlocking substantial amounts over recent months. In July, Aptos will release 11.31 million APT tokens, worth $77 million. This follows releases of $101 million in May and $102 million in June. Notably, APT’s price has seen a significant decline, dropping from $17.63 in April to $6.99 by late June, a 60% decrease.
Similarly, Arbitrum (ARB) will unlock $75 million worth of tokens on July 16. This follows releases of $95 million in May and $105 million in June. After a major unlock of 1.1 billion ARB tokens in March, the token’s price has dropped by 63%, from $2.27 to $0.82.
Other projects such as Optimism (OP), Sui (SUI), Immutable (IMX), and Starknet (STRK) have also scheduled substantial unlocks for July, continuing their recent trends of releasing millions worth of their native tokens.
Anticipated Impact on the Market
The upcoming token releases are likely to have significant implications for the market. Investors and analysts will be closely watching the price movements and market reactions as these large volumes of tokens become available. The behaviour of early investors and team members in response to these unlocks could influence market stability and token prices in the short term.