$500M in Token Unlocks This Week Could Add Pressure to Altcoin Markets

Major token unlocks, including Worldcoin and Arbitrum, may impact market prices as additional supply becomes available.

This week, cryptocurrency markets are bracing for a wave of token unlocks valued at nearly $500 million, a move that could create selling pressure across various altcoins. With tokens from projects like Worldcoin (WLD), Arbitrum (ARB), and Axie Infinity (AXS) scheduled to be released, investors are keeping a close eye on how the increased supply might affect prices.

The largest unlock of the week comes from Worldcoin, where approximately $80 million worth of WLD tokens will be distributed to team members, advisors, and investors. This 37 million WLD emission will increase the token supply by 7%. Initially, these tokens were subject to a three-year lock-up period, which was extended to five years in July, reflecting the project's efforts to ensure long-term development.

Other notable unlocks include $51 million of Arbitrum's ARB, $40 million in Eigenlayer's EIGEN, and $40 million worth of Axie Infinity's AXS, according to data from TokenUnlocks. These tokens are set to be released over the next seven days, with each project seeing varying percentages of their total supply unlocked. For instance, Taiko, a Layer 2 network, will see a significant 15% of its total supply unlocked, valued at $18 million.

One aspect that concerns traders is the impact of these unlocks on the token prices. Historically, large unlocks can lead to selling pressure as newly unlocked tokens become available. The anticipation of selling can lead to a preemptive sell-off, causing the token price to drop even before the actual unlock occurs. Research from TheTie indicates that most of the price impact tends to occur within two weeks following the unlock event.

However, it's not always guaranteed that the unlocked tokens will immediately hit the market. In some cases, tokens are used for ecosystem development, staking, or governance, which can mitigate the selling pressure. If the market interprets the unlock as a sign of project progress or utility, it can lead to price stability or even a rally.

In addition to WLD, ARB, and AXS, other notable unlocks scheduled this week include STRK, TAIKO, APE, and PIXEL. A combined $200 million worth of tokens will be released in what is known as a "cliff," a term used to describe the release of a large number of tokens in a single event. These cliff unlocks add further uncertainty to the market, as the sheer volume of tokens could influence market dynamics.

For Solana (SOL), $80 million worth of tokens will be unlocked as part of an ongoing linear emission plan. Unlike cliff unlocks, linear unlocks gradually release tokens over time, which may help absorb the supply more smoothly into the market.

As the token unlocks approach, traders and investors will be watching closely to see whether these new supplies are absorbed by the market or lead to significant price corrections. The response to these unlocks will likely provide insights into market sentiment for altcoins and how projects manage the release of large token supplies.

**DALL-E Prompt:** A wide image showing cryptocurrency tokens being unlocked from a vault, with various altcoin symbols like Worldcoin, Arbitrum, and Axie Infinity floating out, reflecting an increase in supply and potential market impact.