Is Crypto Market Ready for These Uptober Token Unlocks?

The crypto market shed millions of dollars and consolidated with negative sentiment. However, the end of Q3 2024 presented the market with bullish cues. Following Binance founder CZ’s release, Bitcoin (BTC) climbed to $64K, catalyzing multiple altcoin rallies. On that positive note, the market marches into Uptober—a bullish October when prices typically ramp up.

Among several events on this month’s schedule, token unlocks are worth watching closely. Token unlocks are a prevalent ritual in the cryptocurrency market. These serve as a crucial mechanism for projects to manage their token supply and incentivize long-term participation effectively.

An Instant Walkthrough: What are Token Unlocks?

Just before you get to understand what token unlocks are, you have to know what and why there is something called token locking or vesting. During the locking or vesting process, the project’s tokens are sealed or locked away from trading/selling for a particular “lock-up period.” This mechanism prevents investors from quickly dumping their tokens, which could negatively impact the project’s value.

While token unlocks is the counter-activity. This event facilitates the release of these previously locked tokens into the market once the lock-up period lifts off.  After unlocking, these tokens become tradable or sellable. Notably, there are two kinds of token unlocks prevalent in the market: Cliff and linear.

In a cliff token unlock, tokens are locked and remain inaccessible for a specific period known as the cliff. Once this period ends, a large portion or all of the locked tokens are released at once. Conversely, in a linear unlock, the tokens are gradually released over a set time frame at regular intervals.

How Will Token Unlocks Affect the Market Dynamics?

Token unlocks can significantly impact market dynamics and influence prices. However, this is not a guaranteed outcome, it’s a matter of possibility or probability. Simply put, we could see prices take a dip, lead a rally, or even stabilize for a while.

When tokens are unlocked and investors sell off a large volume, the increased supply can tank the price. On the flip side, if the unlock coincides with positive developments in the project, the token may experience a bullish trajectory. Either way, there will be a change, as an unlock—especially a cliff unlock—disturbs the supply-demand equilibrium.

Top Upcoming Token Unlocks in Uptober (October 2024)

This October, the crypto market will witness the unlock of tokens worth over $3.65 billion as per TokenUnlocks data. Nearly 13-15 projects have scheduled their token unlocks —mostly cliff and a very few linear ones. Here are the top 5 token unlocks to keep an eye on.

1. Ethena (ENA)

On October 2, Ethena Labs, an Ethereum-based synthetic dollar protocol, scheduled the unlock of 428.38 million ENA worth $158.14 million — 22.53% of the circulating supply. Based on data, only 9.74% of the token’s total supply is unlocked. 

Reportedly, the portion being unlocked is allocated for ecosystem development. At the time of writing, ENA holds a market cap of $725.8 million, and is priced at $0.3817.

2. Celestia (TIA)

After 30 days, modular blockchain Celestia will unlock 16.4% of its total supply — 175.74 million TIA worth $1.02 billion. This is the second biggest unlock of the month. Based on data, only 24.9% of TIA’s supply is currently unlocked.

This TIA unlock event will follow this allocation plan: 33% to initial core contributors, 33% to Series A and B investors, and 33% to seed investors. Lastly, a small portion of 0.07% will go to research and development (R&D) and ecosystem initiatives. Currently, at press time, TIA is trading in the market for $5.77 with a market cap of $1.23 billion. 

3. Sui (SUI)

The L1 blockchain Sui Network is set to unlock over 64.2 million SUI — 2.06% of the token’s supply — worth $113 million on October 1. Reportedly, 61% of this unlock—approximately $65 million worth of SUI (39.16 million SUI)—is allocated to Series A and B investors. 19.6% of the allocation is designated for the community reserve, and early contributors will receive 16.1%. Mysten Labs will hold the remaining unlocked tokens in its treasury.

TokenUnlocks data shows that merely 26.84% of SUI’s supply is unlocked. When writing, SUI traded at $1.83 with a market cap of $4.89 billion.

4. Taiko (TAIKO)

Taiko, an Ethereum Layer 2 ZK rollup, will release 12 million TAIKO — 1.2% of the total supply — on October 14. Data indicates that only 9.32% of TAIKO’s total supply have been unlocked. As per data on TokenUnlocks, these tokens are reserved for the upcoming phase of Trailblazer airdrop. At press time, TAIKO was price at $1.87, holding a market cap of $141.7million.

5. Aptos (APT)

On October 11, the L1 PoS blockchain Aptos will be staging an unlock of 11.31 million APT— 2.25% of the circulating supply. As of the current data, over 390.13 million APT is the unlocked portion of the supply.

The unlocked APT tokens will be distributed as follows: 35% is allocated to core contributors, 28.38% to the community, 24.84% to the project’s investors, and the remaining goes to the Aptos Foundation. At the time of writing, APT traded at $7.86 and a market cap of $3.95 billion.

Besides Taiko, another Ethereum L2 Mode is gearing up for a huge token unlock event. It will unfreeze 500 million MODE tokens — i.e., 38.46% of its circulating supply. 

Meanwhile, the other token unlocks [Cliff unlocks] of this Uptober are —  Arbitrum (92.65M ARB), Starknet (64M STRK), ZetaChain (53.89M ZETA), Cardano (37.06M ADA), Immutable (32.47M IMX), ApeCoin (15.6M APE), Axie Infinity (12.58M AXS) and dYdX (9.88M DYDX). Meanwhile, some notable linear unlocks scheduled are — STEPN’s GMT (20.18 million GMT), Portal (6.94 million PORTAL), and Akash Network (480.31K AKT). 

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The NewsCrypto team encourages readers to conduct their own research before making any investment decisions.