Unlocking Token Supply in the Crypto Market: What You Need to Know
As a savvy cryptocurrency investor or market analyst, it is essential to understand the implications of unlocked token supplies on the market. Recent research on the top 300 cryptocurrencies by market capitalization has brought to light some key findings that could influence prices and sentiment in the market.
Most New Crypto Projects Will Unlock Significant Supply
- Analysis based on data from CoinGecko as of May 8, 2024
- Excludes stablecoins and wrapped assets
- Focuses on market cap to fully diluted valuation (FDV) ratio
According to the analysis, there is a significant number of low-float cryptocurrencies within the top 300 coins, representing a substantial upcoming supply set to enter the market. Notable examples of such coins with low ratios include Worldcoin (WLD), Cheelee (CHEEL), Starknet (STRK), and Saga (SAGA), all launched in 2023 or 2024.
The Rise of New Projects in the Crypto Space
- 54 out of 64 low-float large-cap cryptocurrencies were launched in the last four years
- Indicates a dynamic expansion in the crypto space
This influx of new projects signals potential market shifts as these tokens become available. As the crypto space continues to evolve, investors and analysts should anticipate both challenges and opportunities resulting from the introduction of new tokens.
Immediate Impacts from Scheduled Token Unlocks
- On May 12, Aptos will release 11.31 million APT tokens
- On May 16, Arbitrum will unlock 92.65 million ARB tokens
These scheduled token unlocks could create significant selling pressure on the respective tokens, influencing market prices and volatility. With approximately $3.58 billion worth of tokens set to be unlocked this month across various projects, the broader market may experience heightened volatility and fluctuations.
Contrasting FDV Ratios of New and Old Cryptocurrencies
- Older cryptocurrencies like Maker (MKR), Aave (AAVE), and Near Protocol (NEAR) have higher FDV ratios
- Most of their potential supply is already circulating
Unlike newer cryptocurrencies with lower FDV ratios and a significant portion of tokens yet to be unlocked, older coins have a higher proportion of their supply in circulation. This distinction highlights the varying dynamics between emerging and established crypto projects.
By
By
By