The Impact of Vested Tokens on Cryptocurrency Market
A volatile week is on the horizon for the cryptocurrency market, with nearly $190 million in vested tokens set to be unlocked. The impending Federal Reserve interest rate decision adds another layer of uncertainty to the macroeconomic landscape.
Vested tokens, once unlocked, inject previously illiquid tokens into the market, leading to an increase in circulating supply and potentially causing significant selling pressure. These tokens are typically part of vesting contracts, where entities receive a promise of unlocking within the project’s initial distribution.
According to data from TokenUnlocksApp, a total of 14 projects are scheduled to unlock $189.97 million in tokens in the upcoming week, with three cryptocurrencies accounting for the majority of the unlocks at $139.62 million.
Optimism (OP) Monthly Token Unlock
On July 31, Optimism (OP) is set to unlock 31.34 million OP tokens, valued at $54.53 million. This event will result in a 2.8% increase in the token’s supply, forming part of the monthly unlocks by Optimism, which contribute to an annual inflation rate of nearly 35%.
The value of the unlocked tokens has fluctuated in previous months, with the same amount having been worth different amounts in previous unlocks, signaling the economic impact of such high inflation.
Sui Network (SUI) Supply Inflation
August 1 will see Sui Network (SUI) unlock $50.06 million worth of 64.2 million tokens, leading to a monthly inflation rate of 2.6%. This release marks a decrease from the previous month’s unlock, with the same amount having been valued higher in July. Series A and Series B private investors are set to receive the majority of the tokens from this unlock.
Early contributors, the Misten Labs treasury, and the Community Reserve will also receive tokens from the unlock, which they can sell to profit from the increased supply.
Avoid Trading ZetaChain (ZETA)
ZetaChain (ZETA) is expected to face the most significant impact from this week’s vesting unlocks. The cryptocurrency is set to release 53.89 million ZETA tokens, worth over $35 million, on August 1.
Despite having a lower nominal value compared to other unlocks, ZetaChain’s release represents a substantial portion of its current capitalization, leading to a potential market flood and price crash as a result of the sudden supply inflation.
Traders will likely closely monitor and attempt to price in the effects of these token unlocks on the affected cryptocurrencies, adding to the expected volatility in the market ahead of the Federal Reserve interest rate decision.
Hot Take: Brace for Impact
As the cryptocurrency market braces for the release of nearly $190 million in vested tokens, the landscape is primed for increased volatility. Traders should remain vigilant and prepared for potential price fluctuations as these unlocked tokens enter circulation. With the Federal Reserve interest rate decision looming, this week promises to be a challenging one for crypto investors.
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