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Highlights
- Ondo Finance (ONDO) leads a massive $3 billion unlocking event.
- A total of 1.94 billion ONDO tokens will be released by January 18, 2024.
- Crypto market faces high volatility risk as several projects prepare for token releases.
This week, the crypto market is set to witness one of its most significant events in recent months as tokens worth nearly $3 billion are scheduled to be unlocked. This event is drawing considerable attention due to the potential market ramifications, with the lion's share of the tokens, approximately 1.94 billion ONDO tokens, coming from Ondo Finance (ONDO).
The Ondo Finance (ONDO) platform, a leader in asset tokenization, is responsible for the largest unlocking scheduled for January 18, 2024. These tokens are valued at $2.23 billion and represent more than 130% of the current circulating supply of ONDO tokens. This release stands as the largest since November 2023 and marks an extraordinary shift in the dynamics of the market, especially considering that ONDO’s average daily trading volume fluctuates between $250-$300 million. The flood of tokens hitting the market will undoubtedly put pressure on ONDO's price stability.
Indeed, the impact of this unprecedented unlocking is already evident. The price of ONDO is showing notable signs of strain. It currently trades at $1.14, down 5% in the last 24 hours and 15% from the start of January 2024. This downward trend follows ONDO’s peak price of $2.10 in mid-December 2023. Investors are showing concern as the imminent token release raises fears of increased volatility.
Joining Ondo Finance (ONDO) in this massive unlocking event are other well-known crypto projects, including ARB (ARB), STRK (STRK), and SEI (SEI). Collectively, these unlocks will significantly affect the market, creating opportunities for those with experience, but adding substantial risk for less familiar investors.
Unlocking mechanisms, where tokens are gradually released into circulation, are common in the crypto space. They often serve to distribute tokens to early investors and development teams without overwhelming the market. This gradual distribution helps prevent sudden price crashes. However, with the scale of this event, and the amount of unlocked tokens vastly surpassing the daily trading volume, the potential for heightened market volatility is very high.
A recent study from The Tie warns that when token unlocks exceed 100% of the daily trading volume, substantial volatility is often observed. Given the large scale of these unlockings, the coming days could see significant market movements.
Investors and market participants will be closely watching how the crypto market absorbs this huge wave of newly available tokens. With substantial volatility expected, those invested in this sector will need to navigate the market carefully, as this week could mark a defining moment for the industry.
