Token Unlocks Worth $17B Could Devalue Crypto, Experts Say
Analysts say the cryptocurrency market should waste a wave of tokens totaling $17 billion by the end of April, raising concerns about devaluation and market saturation.
This is a recent market activity with a long-term liquidation of nearly $10 billion further exacerbating liquidity.
Analysts say
Beincrypto reported Historical encryption and clearing activities cause US President Donald Trump’s tariffs. However, Bybit CEO Ben Zhou estimated that cryptocurrencies following U.S. tariffs could be Between $800 million and $10 billionfar exceeding the reported figures.
Analysts are now warning that the market is increasingly reluctant to support a new execution environment lacking a unique value proposition.
“The market no longer absorbs an execution environment without adding value,” analysts Write.
When they quote –Token generation activity (tge) struggles with numerous projects, this view is consistent with recent reports Crypto Investors’ Transition Focus From Meme Coins to Altcoins with Real World Value.
Quote Messari, Recent Analysis defi Researchers Monk highlighted the performance struggle of multiple blockchain projects after TGE. Since the token is released, such as starknetmodel, explode,zksync, scrollagree to a sharp decline.
The exception to this trend is Super fluid,who Tokens are hyped Soared 1100%. This highlights the rarity of success in the struggling chain.
Historically, large-scale token unlocking has hurt the price. A study by KeyRock Research found that 90% of token unlocking leads to a price drop as supply increases usually exceeds demand. The attribution schedule will increase sales pressure when many tokens are issued, often cashing out by early investors and insiders.
Arthur, founder and CIO of Rebel Capital, reinforced this view. He stressed that TVL’s sharp drop (total value locked) dropped significantly in most chains after its token was released.
“This not only indicates weaker token demand, but also challenges in attracting and retaining users and liquidity.” additional.
Analysts explain why new chains are struggling
It is worth noting that the data about Defilama show Projects like scrolling and explosions have seen their TVL reduce More than 80% since their TGES. A broader trend shows that the market has an oversupply of block space.
According to the Rebel Capital executive Layer 1 (L1) and Layer 2 (L2) chains It is becoming increasingly difficult to distinguish yourself. The challenge is as an established network or something like that Solana ((sol) and other prominent L2 Solution Continue to grow.
“this Solana Strangeness. L1 and L2 crops are launched, pumped and dropped in 2024. TVL is exhausted; guesses are gradually disappearing, and demand is zero. Meanwhile, Solana just keeps winning. Comment.
Users stressed that Solana’s strong foundation allows it to surpass new chains. He cites Solana’s excellent speed (400ms block) and super low transaction fees. According to analysts, other valuables about Solana include its thriving ecosystem span defi and nfts,,,,, Meme Coinand real-world assets (RWAS).
Recent struggles for blockchain launches show that intolerance to redundancy is becoming increasingly intolerable. Projects that cannot justify their existence will find themselves downgrading to irrelevant. At the same time, the established network has strong practicality, and user adoption and mobility dominates.
Therefore, developers and investors must turn their attention to innovation. New chains have the potential to be another casualty in an increasingly competitive space without clear and compelling use cases.
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