- July looks set to be a volatile month.
- More than 730 million tokens will be in circulation.
- A massive sell-off by investors is imminent.
July promises to be a pivotal month for the crypto industry with major developments including the possible approval of an Ethereum ETF, a possible altcoin season, and a selloff by Mt. Gox users. Amid these developments, the crypto market is expecting a surge in token unlocks from several crypto projects, which is raising concerns about a selloff.
July Predictions: Crypto Markets Will Flood With Token Unlocks
According to Unlock TokenA number of altcoins are set to make a token splash in July. Leading the pack is Altlayer’s ALT, which is set to inject $127 million worth of tokens into the market.
XAI plans to release 72% of its $94 million worth of circulating supply by July 9, with the potential for massive chaos in the aftermath.
Worldcoin’s WLD is also included in the extensive list and plans to begin large-scale linear unlocks on July 24th. The OpenAI founder-owned project plans to release 6.62 million WLD tokens daily, over 730 days, worth $18 million at press time. This massive unlock totals $13 billion, representing 54% of the market capitalization.
Other projects scheduled to unlock tokens include DYDX, SUI, IO, XAI, IMX, APT, STRK, ARB, AXS, APE, and PIXEL. TokenUnlocks estimates that these token unlocks will impact $730 million throughout July.
Cryptocurrency Market Bracing for Impact
Many modern crypto projects use fixed token supply locked tokens to manage supply and express long-term commitments.
The token is considered a bearish event, although it builds investor confidence amid team members’ fears of a token dump, as historically, a surge in circulating supply often encourages investors to capitulate and lock in profits, causing panic among retail investors and underperforming the price on the unlock date.
For example, Arbitrum, which is expected to unlock $76 million worth of tokens in July, plunged 18% after unlocking 76% of its circulating supply in March. Likewise, Apecoin, whose tokens were scheduled to be unlocked in July, was down 26% in January when it released 4.23% of its total supply into circulation. The BAYC utility token is expected to unlock 2.48% in July.
It is unclear how the tokens scheduled to be unlocked will react, but we expect significant volatility in July.
from the other side
- Mt. Gox’s rehabilitation trustees plan to: Repaying assets totaling $9 billion. As of July 1, it consists of 142,000 Bitcoin, 143,000 Bitcoin Cash, and 69 billion Japanese yen in fiat currency.
- Many cryptocurrency projects strategically announce major positive news around token unlock dates to minimize the impact of token unlocks on market sentiment.
Why this matters
July is gearing up to be a roller coaster month with several major developments scheduled. The upcoming wave of token unlocks will bring a lot of volatility to the market, prompting participants to prepare themselves and adjust their strategies accordingly.
When is the Ethereum ETF launched?
Ethereum ETF expectations subside as SEC returns S-1 form
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