The upcoming unlock of more than 2% of the circulating supply of the native token of Aptos blockchain, APT, has possibly triggered a significant drop in the token’s value, as per data from TokenUnlocks. More than 4.5 million tokens, approximating $30 million in assumed worth, are set to be unlocked this Friday, stirring concerns in the crypto community. Interestingly, while $21 million worth of tokens are mapped for distribution among the community, the rest are to go the Aptos Foundation.
Historically, such token unlocks have been observed to correlate with depreciations in asset prices as investors tend to offload their holdings preemptively, expecting a torrent of fresh tokens in the markets to dilute value. This theory may find credibility in what is occurring with APT as its value has curtailed by over 3.2% in the past day and 7.1% over the last week, sinking to a $6.57 mark. The token’s performance has disappointed in comparison with others like bitcoin and ether, as indicated by CoinDesk’s market data.
This current trend isn’t unfamiliar to APT. Aptos had previously unlocked nearly $30 million worth of APT tokens back in July 2023, and a staggering $50 million in April the same year. Both instances witnessed a decrease in APT’s price in the week leading to the unlock.
These repeated experiences beg the question – are token unlocks beneficial or detrimental to a crypto asset’s performance? On one hand, the unlocking and subsequent distribution of tokens can lure newer investors, boosting community involvement and potentially the asset’s value. On the flip side, it may act as a deterrent for current investors, inciting them to sell before the market is potentially flooded with additional tokens, which might spark a price plunge.
As crypto enthusiasts and investors keenly watch these market trends, the side of the coin that this impending event will lean towards remains to be seen. Aptos’ representatives, unfortunately, remained unreachable for a comment at the time of this report. With the crypto market’s temperaments and unpredictability, the looming token unlock certainly calls for watchful eyes in the community.
Source: Coindesk
