The post Why altcoin market declines after token unlocks appeared on BitcoinEthereumNews.com.

Altcoins face an early crypto winter, mainly due to the large token unlocks in 2024. According to Bloomberg, early project investors seek to sell the received tokens quickly, wanting to lock in short-term profits. At the same time, they do not want to keep unlocked altcoins on their balance sheets, with an eye to future growth. Data from the Token Unlocks platform, which tracks 138 projects, indicates that 120 are expected to unlock tokens in 2024. Analysts estimate the total market value of this volume of assets to be $58 billion. Edward Chin, co-founder of the investment company Parataxis Capital, believes that massive sales of such assets are putting intense pressure on the altcoin market. At the same time, brokers often need to offer potential buyers tokens from early investors at a discount of up to 40%. “The market is strange at the moment, in that the many infrastructure projects that investors funded over the bear market are now coming to their token launch, but there is not a ton of regular buyers of these tokens at high prices.”  Lex Sokolin, Generative Ventures co-founder How does unlocking affect tokens? The timing and scale of token unlocking can significantly impact market dynamics. Unlocking many tokens simultaneously can reduce interest in purchasing and temporarily drop token prices. Token unlocking events can cause market fluctuations as investors react to the new supply of tokens. Investors may adjust their positions based on the unlock schedule and the expected impact on token prices, resulting in price changes. Which tokens collapsed after unlocking? For example, the token of the dYdX project, DYDX, has dropped by 61% over the past three months. At the time of writing, the asset price is $1.4, and its market capitalization is $838 million. Source: CoinMarketCap A similar situation is observed in…

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Filed under: News - @ June 28, 2024 7:28 am