Bloomberg points out that while “unlock sales” may be a factor in the intensification of the decline, the prices of tokens such as DYDX and Avalanche (AVAX) have already been cut in half, and PYTH has fallen by as much as 70%. TokenUnlocks data shows that all three tokens were unlocked in May, suggesting that unlock sales may be the main cause of the decline.
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“Competition coins” experience an early winter
Retail investors sell off before venture capital unlocks
Only 12 projects have risen since March
CoinMarketCap
(CMC) data shows that since Bitcoin reached its peak in March, the market value of competition coins, excluding Ethereum and stablecoins, has plummeted by 30%, while Bitcoin’s market share remains above 53%.
In addition, many projects this year are experiencing “unlocks” of their tokens. TokenUnlocks data shows that out of the 138 tokens it tracks, 120 will be unlocked this year, with a total market value of approximately $58 billion.
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Trend of competition coin market value
Edward Chin, co-founder of Parataxis Capital, said:
Given that these unlock schedules are public and known, when “non-venture holders” try to sell before the venture capital unlocks, the downward pressure on prices may intensify. You can also see these effects fermenting downstream in the OTC market, as brokers are often asked to provide locked tokens to early investors or employees at a discount of more than 60% off the spot price.
Bloomberg points out that while unlock sales may be a potential cause of the intensified decline, according to CMC data, the prices of DYDX and Avalanche (AVAX) have already been cut in half, and PYTH has fallen by 70%. TokenUnlocks data shows that all three tokens were unlocked in May, indicating that unlock sales may be the main cause of the decline.
Only 12 projects have risen since March
Tanawat Chiewhawan, CEO of TokenUnlocks, explains the “unlock sales”:
Token unlocks actually drove prices up last year, but venture capital and retail investors have also started paying more attention to token unlocks and circulating supply data, leading market participants to lean more towards short-term gains rather than holding unlocked tokens for long-term returns.
Bloomberg concludes by quoting CCData, stating that out of the approximately 90 mainstream non-stablecoin assets tracked on CEX, since Bitcoin reached its all-time high on March 14, only 12 projects have risen, while 81 have fallen. Among the top 100 tokens by market capitalization, 61 have fallen by more than 25%, and 23 have fallen by more than 50%.
AVAX
CMC
CoinMarketCap
dydx
PYTH
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