ARB, STRK, AXS: Three token unlocks worth over $350 million to watch out for ahead of Bitcoin halving week

Source Fxstreet
Apr 13, 2024 06:00
  • Arbitrum, Starknet, and Axie Infinity ecosystems have voluminous cliff unlocks lined up for next week.
  • ARB, STRK, and AXS tokens worth millions would be unleashed, alongside others like IMX, PIXEL, MANTA, and APE.
  • Token holders should brace for volatility to escape exit liquidity ahead of Bitcoin halving week.

Several ecosystems have their unlock events lined up for next week, starting Sunday, April 14. Millions of dollars’ worth of tokens will be unleashed into the market, increasing the individual circulating supplies of the projects. Volatility should be expected with investors looking to trade around the events. This will be a week to the Bitcoin halving, a much-awaited event expected to kickstart the next bull cycle.

Also Read: Arbitrum could face 20% correction as ARB upside looks capped

Token unlocks to watch before Bitcoin halving

While there are many token unlock events this coming week, three stand out for their voluminous chunks of unleashes. Arranged in the order of dates:

The Starknet ecosystem will unlock 64 million STRK tokens worth $117.12 million at current rates on April 15. The tokens, constituting 8.8% of the network’s circulating supply will be allocated to early contributors and investors.

Ethereum Layer 2 (L2) ecosystem Arbitrum will see the largest token unlocks event of the week happen. On April 16, the network will allocate 92.65 million ARB tokens comprising 3.5% of its circulating supply and worth $131.56 at current rates to the Arbitrum team, the future team, and future advisors, and investors.

Right after ARB unlocks will be AXS unlocks on April 17, where the Axie Infinity ecosystem will unleash 10.87 million AXS tokens worth $103.91 million to the market. Making up for 7.6% of the network’s circulating supply, the chunk will be issued toward staking rewards, the team, and for the ecosystem fund.

Possible implications of token unlock events

Notably, if the respective token unlocks lead to a flood of sell orders from the investors or team members looking to cash out, it could create downward price pressure on the individual tokens. Nevertheless, the overall market sentiment and conditions also has bearing depending on recipients of the tokens perceive the events. In a bullish market, investors may be more optimistic about token unlocks, while in a bearish or uncertain market, they may be more cautious.

If the token unlocks are associated with a successful network milestone, partnership announcement, or positive developments for individual ecosystems, it could be perceived as a bullish signal. Investors may interpret the unlock as a vote of confidence in the project's future prospects.

Additionally, token unlocks can also provide liquidity to investors. This would allow them to freely trade the tokens and potentially increase trading volume.

Cryptocurrency metrics FAQs

The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.

Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.

Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.

Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.

Other token unlocks to look out for

  • 15.6 million APE tokens, an ERC-20 governance and utility cryptocurrency, worth $25.27 million will be unlocked on April 17.
  • Web3 modular ecosystem Manta Network will pour 21.67 MANTA tokens worth  $57.42 million on April 18.
  • Gaming ecosystem ImmutableX will unlock 34.19M IMX tokens worth $87.53 million on April 19.
  • Ronin Network’s social casual web3 gaming ecosystem Pixels will unlock 54.38 PIXEL tokens worth $34.66 million on April 19.

Notably, all these are cliff token unlocks, where a significant portion of the tokens is locked up for a specific period initially, with full access granted after the cliff period expires. This is unlike a linear token unlocks, which involve a gradual release of tokens over time, typically in regular intervals such as daily, weekly, or monthly increments.

Unlike in cliff unlocks, the Linear alternative spreads out the token release schedule, potentially reducing the impact of sudden influxes of tokens hitting the market at once.

Disclaimer: For information purposes only. Past performance is not indicative of future results.