Crypto Markets Under Pressure as $2 Billion in Altcoin Token Unlocks and $11 Billion in Bitcoin Distribution Lurks

Cryptocurrencies are still stuck in a corrective phase, but a wave of supply events worth billions of dollars could further delay any meaningful recovery.

“A rapid succession of nearly $2 billion in token unlocks over the next ten weeks could depress the altcoin market,” crypto analytics firm 10x Research said in a Wednesday report.

Unlocks of major tokens in crypto are usually bearish events, increasing supply by distributing assets previously locked up in acquiring contracts to team members, organizations and early investors, including venture capital firms.

Over the next two months, approximately $97 million in aptos {{APT}}, $79 million in starkware {{STRK}}, $94 million in arbitrum {{ARB}}, $53 million in Immutable Avalanche’s {{AVAX}}, $64 million in optimism {{OP}}, $28 million in PRIME, nearly $1 billion in sui {{SUI}}, $48 million in Etna (ENA), $171 million worth of Altlayer’s ALT and $135 million worth of XAI tokens will be added to circulation, according to data collected in the report.

“Venture capital investors could be pressured to lock in recent gains, which could limit the upside performance of tokens with positive momentum, especially those where unlocks become available,” the report said.

It’s not just altcoins that are facing selling pressure

More than $11 billion worth of bitcoin {{BTC}} will be distributed among creditors of crypto exchange Gemini’s Earn program and long-defunct crypto marketplace Mt. Gox, K33 research analyst Velte Lunde warned in a Tuesday report.

Read more: Mount Gox’s Impending $9 Billion Payout Could Depress Bitcoin Prices, K33 Research Warns

“The coming months are set to see waves of good old crypto FUD,” Lunde said, referring to the popular one crypto acronym for fear, uncertainty and doubt.

Amid the upcoming supply events, one market observer suggested that the FTX refunds could provide some relief.

Pending bankruptcy court approval, some $14 billion to $16 billion in U.S. dollar funds could be paid out to creditors, and a good chunk of that could flow back into the crypto market, says Arthur Cheong, founder and chief investment officer of DeFiance Capital.

“Expect at least $3-$5 billion of crypto-native liquidity to be injected back into the market,” Cheong said in a X post Wednesday.

Ugly action in crypto on Wednesday

At the end of the US day, the broad CoinDesk 20 Index was down 3.4% over the past 24 hours, with Bitcoin down 2.5% to $61,500 and ether {{ETH}} down 3.6%. Bitcoin cash {{BCH}} and Solana {{SOL}} were the index’s worst performers, each down more than 7%.