Upcoming Token Unlocks May Exert Downward Pressure
CryptoNewsTerminal Staff20 May, 2024
Upcoming Token Unlocks May Exert Downward Pressure
$15.5 Billion Worth of Tokens Set to Unlock, Binance Warns of Price Pressure Binance Research recently published a report highlighting that tokens worth approximately $15.5 billion are expected to unlock between 2024 and 2030. This influx of tokens into the market could potentially exert downward pressure on prices, especially if demand does not keep pace with the increased supply. Tokens launched in 2024, in particular, have a low market capitalization relative to their fully diluted valuation (FDV) due to their lower circulating supply at launch. Binance Research observes that the market cap/FDV ratio for tokens launched in 2024 stands at just 12.3%, indicating substantial future unlock. Tokens with a low initial circulating supply can experience strong initial price action due to scarcity. However, constant unlocking and selling pressure can weigh on their long-term growth prospects. Overall, Binance Research underscores the potential impact of these token unlocks on market dynamics and encourages investors to carefully consider the implications before making investment decisions.
