Crypto Markets Brace for $500M Token Unlock Wave: Market Impact and What’s Ahead

• Over $500 million in token unlocks will be going ahead this week.
• Cliff unlocks will release all tokens at once, which can result in immediate market volatility.
• Linear unlocks represent a majority of the week’s token unlocks and will be released gradually.

Roughly $500 million worth of token unlocks are expected to hit the crypto markets over the next week, raising the circulating supply of these tokens by tens of millions.

Token Unlocks

According to TokenUnlocks, around $500 million worth of crypto tokens are set to be unleashed into the markets over the coming week.

Token unlocks are when locked tokens become available for trading, typically increasing their respective circulating supplies. They’re also important for the project(s) and underscore a significant milestone in their roadmap/development journey.

These unlocks generally impact market dynamics as they increase the circulating supply of a given crypto, usually by very large amounts. Depending on how these unlocks are rolled out, their influence on the direction of the market can vary.

Upcoming Linear Unlocks

There are two types of unlocks in crypto: “linear” and “cliff.” Linear unlocks occur when tokens are gradually trickled into circulation over a pre-determined timeframe.

This is deliberately done to minimize the impact on the market, preventing gigantic sell-offs the minute the tokens are distributed. Eleven large linear token unlocks are coming up this week; here are some of the biggest.

Solana (SOL) will be releasing 524,030 SOL worth roughly $76.8 million into the markets, amounting to 0.11 of its circulating supply. Worldcoin (WLD) will be adding 7.32% to its circulating supply when it unlocks 37.23 million WLD tokens worth around $72.2 million.

Bittensor (TAO) will increase its circulating supply by 0.97%, unlocking 71,760 TAO worth roughly $45 million. Avalanche (AVAX) will be unlocking 700,000 AVAX tokens worth almost $19 million, adding 0.17% to its circulating supply.

Upcoming Cliff Unlocks

Cliff unlocks occur when a large number of tokens are released at the same time. Naturally, this can create big price fluctuations as investors scramble to secure profits or at least minimize losses from the initial sell-off.

Just five tokens represent $161.11 million of the week’s pending unlocks.

Firstly, Aptos (APT) will be dropping 11.31 million tokens worth approximately $99.3 million into wallets, which is 2.25% of its circulating supply. Optimism (OP) will be unlocking 12.47 million tokens, which currently totals approximately $20 million.

Taiko’s (TAIKO) upcoming token unlock will see 12 million TAIKO worth around $16.7 million enter the market, adding 15.62% to its circulating supply. Xai (XAI) will be unlocking 35.88 million XAI worth $7.5 million, increasing its circulating supply by 6.2%.

Finally, 18.53 million Cardano (ADA) will be unlocking $6.6 million, boosting its circulating supply by 0.05%.