attention to the unlocking of TIA tokens

Today, Wednesday, October 30, 2024, 175 million TIA tokens of Celestia will be unlocked. 

Given that the current circulating supply is 220 million tokens, today’s unlock will suddenly increase it by about 80%.

Celestia and the native token TIA

Celestia is a crypto project launched about a year ago.

It is a level 1 blockchain with an innovative modular architecture that separates execution from consensus, allowing for better efficiency and scalability.

In this way, it acts as a data availability layer for rollup and layer 2, to improve their performance and scalability. 

The project has garnered a lot of interest thanks to its innovative technological approach, so much so that it has raised 155 million dollars in funding. 

Its goal is to provide a new tool for easy implementation of new blockchains, thus allowing developers to experiment and innovate without the typically high costs associated with the development of new blockchains. 

The native cryptocurrency of Celestia is TIA, whose total supply is about 1 billion tokens.

Price performance of the TIA token (Celestia)

Up to now, of the billion TIA tokens created, only 220 million have been released, which is just over 20%.

With today’s unlocking, the percentage rises to just under 40%, and this means that in the coming years, many more unlockings will occur. 

TIA debuted on the crypto markets in November 2023 at a price of about $2.3.

Thanks to the bull run at the end of 2023/beginning of 2024, its price in February even reached $20, almost tenfold in three months. 

However, that was evidently a mini-bubble, and in fact, it already started to burst in March. 

In July, the post-bubble decline was already over, and at that point, the price had still remained above the initial one. 

Then, however, from the 4.8$ in July there was a further decline, much less steep, with a minimum peak of 2024 at 3.9$ in September. 

Since then until today, it has done nothing but move sideways between $4.5 and $6.6, so much so that it has not been able to take advantage of the Bitcoin recovery in recent days. In fact, compared to seven days ago, it is at -14%, while compared to thirty days ago, it is at -16%.

The paure

The recent trend of the TIA price, which is now around $5, is heavily influenced by fears of today’s unlocking.

A sudden 80% increase in the circulating supply could also mean a sudden increase in selling pressure, given that many of those who will receive the TIA tokens today might decide to sell them. 

There are in fact two factors that lead to consider this possible. 

The first is that the current market value is more than double the initial one. This means that those who receive the tokens today could sell them for a good profit, and therefore could easily decide to take advantage of it. 

The second is that the current phase of the crypto market sees capital temporarily shifting to Bitcoin. 

Just consider that among the top 15 cryptocurrencies by market capitalization, only two perform better than BTC in the last seven days: SOL of Solana, whose percentage gain is only slightly greater than that of Bitcoin, and DOGE of Dogecoin, pumped once again by Elon Musk but still very far from the highs. 

There are even five cryptos among the top 15 (one third) that are in loss compared to seven days ago, precisely because the +8% of Bitcoin is draining capital from altcoins. Just consider that the dominance of BTC is at its highest since March 2021, and it has been steadily increasing for almost ten days. 

The unlocking of TIA tokens (Celestia)

Approximately 175 million previously blocked TIA will be today. 

This is the largest single unlock event since the token was launched. The total value of the tokens released will be over 900 million dollars. 

The overall spot trading volume of TIA on exchanges in the last 24 hours was below 200 million dollars, so there is a serious risk of a true surge in selling pressure today. 

58 million tokens will be given to the main contributors of the project, while the others will be distributed to the early investors, with 65 million tokens given to the early investors of the series A and B funding rounds, and 52 million to the initial investors.

The reason why these tokens were not distributed earlier, that is, a year ago, is precisely to avoid the selling pressure from being immediately high. And so there could be the mini-bubble mentioned before. 

Now, however, a year later, they are being distributed, and it is very likely that a part of these will end up being sold.