Every week we provide insights into popular assets and hot topics in crypto, so you can easily learn more about the crypto market in bite-sized pieces.
In this Crypto in Focus we take a closer look at Token Unlocks, an important crypto indicator that's not often talked about.
What is Token Unlock
Token Unlock is a process where previously locked tokens are moved into the private crypto wallets of initial investors, team members or partners and become freely tradable on the market, which can have a significant impact on the price of those cryptocurrencies and thus the value of your portfolio. This process can be likened to public companies issuing new shares (dilution).
Bitcoin ($BTC) currently has ~94% of all its coins that will ever exist in circulation. Some tokens that operate on Ethereum ($ETH), may already have all of their tokens in circulation, but with no set cap, meaning there may be an infinite number of them in the future. What would happen to the current price of bitcoin if there were 2x as many on the market tomorrow?
However, the highest volatility can be expected for projects that have only recently appeared on the market such as Optimism ($OP), Arbitrum ($ARB), Dymension ($DYM), Pyth Network ($PYTH) and many others that have only 15-25% of their tokens in circulation. This means that sooner or later 4× to 7× as many will hit the market.
Token unlocks in the next 30 days
> $5M upcoming unlocks of tokens that are available at Change
You can find more information about unlocks on https://token.unlocks.app/
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