The Impact of Upcoming Token Unlocks on the Market

Next week, several significant token unlocks are anticipated, potentially impacting the cryptocurrency market dynamics. Token unlocks, or "unlocking," involve releasing previously frozen tokens from investment rounds or other funding programs.

The Effect of Unlocks on the Market

Development teams typically plan tokenomics carefully to prevent substantial selling pressure during various unlocking stages, thereby avoiding a drop in token prices. However, factors such as a lack of liquidity or early investors looking to secure profits immediately after unlocking can negatively affect asset prices.

We have highlighted three key token unlocks to watch next week..

1. Immutable (IMX)

   • Unlock Date: August 9
   • Number of Unlocked Tokens: 32,470,000 IMX
   • Current Circulating Supply: 1,540,350,203 IMX

   Immutable X is a Layer 2 solution for scaling NFTs on the Ethereum blockchain. In September 2021, the project raised $12.5 million in an IMX token sale on CoinList in just one hour, later securing $60 million in an investment round and an additional $200 million from ParaFi Capital, Declaration Partners, Tencent Holdings, and others in March 2022.

   On August 9, the circulating supply of IMX will increase by 32.47 million tokens. These tokens will be directed towards project development and its ecosystem. The crypto community is actively discussing IMX dynamics, linking it to frequent unlocks. One user on X remarked, “During the last bull market, $IMX had a higher price but a lower market cap. Now, the market cap is higher, but the price is significantly lower. This is due to the unlocking of supply.”

2. Xai (XAI)

   • Unlock Date: August 9
   • Number of Unlocked Tokens: 35,880,000 XAI
   • Current Circulating Supply: 519,821,836 XAI

   Xai is a pioneering third-layer gaming blockchain utilizing Arbitrum technology. The project emphasizes simplicity and user-friendliness, eliminating the complexities of wallet management and making blockchain integration seamless in the gaming ecosystem.

   On August 9, Xai will unlock over 35 million XAI tokens, distributed among the team, investors, the project reserve, and the ecosystem fund.

3. Ethena (ENA)

   • Unlock Date: August 11
   • Number of Unlocked Tokens: 14,890,000 ENA
   • Current Circulating Supply: 1,806,250,000 ENA

   ENA is the native token of the DeFi protocol Ethena, which issues the synthetic dollar USDe. This asset is used for governance within the ecosystem and incentivizes participation and investment in the protocol.

   ENA's debut included an airdrop from Ethena Labs, distributing tokens worth $450 million to the community. On August 11, the project will unlock nearly 15 million ENA tokens for ecosystem development.

Other Upcoming Unlocks

Next week will also see token unlocks from projects such as dYdX (DYDX), Hashflow (HFT), and Moonbeam (GLMR). The total value of the released tokens will exceed $60 million. These events could significantly impact the market, so investors are advised to monitor these assets closely.

Conclusion

Selecting altcoins for investment in August 2024 requires careful analysis. Including tokens from projects like Immutable, Xai, Ethena, and others in an investment portfolio could be a justified step, taking into account the upcoming updates and events that may influence their value. Despite the current market instability, a prudent investment approach and an understanding of the key factors affecting altcoin prices can help reduce risks and enhance profit potential.