coindesk.com
Crypto tokens $DYDX, OP, $SUI dropped sharply ahead of their large token unlocks, underperforming the broader Coindesk Market Index.
Unlocks increase a digital asset's supply and allow early investors to sell tokens.
Several major alternative cryptocurrencies including native tokens of dYdX ($DYDX), Optimism (OP) and Sui ($SUI) dropped Monday as massive token unlocks weighed on prices amid a generally negative day on the broader crypto market.
Altcoins face almost $650 million worth of increase in their supply through this week, according to data from Token.Unlocks and CryptoRank.
$DYDX will see roughly $480 million worth of tokens added to its circulating supply, almost doubling the current amount of tokens on the market. OP, $SUI, Axelar ($AXL), Immutable X ($IMX) and 1inch ($1INCH) and Hedera ($HBAR) also have large unlocks scheduled in coming days.
Token unlockings translate to an increase in the asset's supply, releasing coins from a vesting period including to early investors. Large unlocking events usually lead to price declines due to the supply increase outpacing investor demand for the asset, a study by crypto analytics firm The Tie found earlier this year.
Axelar ($AXL) dropped 10% in the past 24 hours as about $18 million worth of tokens – some 5% of its market capitalization – were added to its supply Monday during its scheduled monthly token unlock, including to early investors, according to CryptoRank data.
$DYDX was down 7% during the same period ahead of the release of $480 million worth of tokens on Dec. 1.
OP declined nearly 6%, with an unlock of $40 million in tokens looming on Nov. 30.
$SUI plunged 8.8% during the day as its supply will increase by $48 million over the course of the week.
$1INCH fell over 4% with its supply set to increase by almost 10%, or $33 million, on Dec. 1. $HBAR and $IMX endured 2%-3% declines with each facing $11 million tokens being unlocked this week.
Meanwhile, bitcoin (BTC) was down 0.7% during the same period, while the broad-market crypto index CoinDesk Market Index (CMI) declined 1.5%.