Typically in market scenarios, token unlocks—instances where previously locked or vested tokens are released into circulation—raise concerns about potential sell pressure and dilution.
However, the current bull market appears to be shifting this perspective. We are experiencing a notable wave of token unlocks across various cryptocurrency projects, and rather than causing market downturns, these events seem to coincide with a cessation of negative price behavior and even significant rallies across multiple projects.
Recent data reveals that eight tokens have undergone recent unlocks while still showcasing impressive price increases despite the additional supply. This trend underscores an emerging narrative in this market cycle: when strong market sentiment, solid fundamentals, and an engaged community support a token, unlock events can act as catalysts rather than obstacles.
WLD and ENA Navigate Heavy Emissions with Ease
Notable examples include Worldcoin (WLD) and Ethena (ENA). These tokens absorbed nine-figure unlock values and still experienced significant price increases following their unlock events. WLD released 10 percent of its supply, equating to roughly $241 million in new token dilution. Instead of being negatively impacted by the influx of new tokens, WLD managed to rise, trading about 80 percent higher the day after the unlock.
Similarly, ENA confronted the release of approximately $711 million worth of tokens, which represented 2.95 percent of its supply. Despite initial surprises for investors regarding early allocations not mentioned in the project’s prospectus, demand for ENA remained exceptionally robust. Many investors holding ENA anticipated substantial value realization soon after the unlock.
Lower-Cap Projects Thrive with Minimal Emissions
Remarkable gains have also been seen among tokens with lower unlock values and smaller market caps. For instance, Parcl’s price skyrocketed 93.6 percent following its unlock event, which was worth only around $2.74 million (6 percent of the overall supply).
Athena and io.net also saw notable increases; ATH surged by 76 percent after a 2.84 percent unlock valued at $13.2 million, while IO rose by 60 percent following a 4.8 percent unlock worth $7.4 million. These outcomes showcase the advantages smaller projects experience when navigating unlocks, especially in a positively charged market environment. With less supply to manage and diminished whale influence, achieving price appreciation becomes more feasible.
Unlock Resilience Relies on Narrative, Not Just Data
A key takeaway is that a high unlock percentage alone does not guarantee bullish price action. Recent events with Morpho illustrate this point clearly, as they unleashed 10 percent of their supply (around $50 million in tokens) and saw a remarkable 70 percent price increase, highlighting the influence of a strong narrative and community in the current market.
Other tokens with higher circulating supplies, such as Aptos and Starknet, navigated their unlocks effectively as well. APT had 1.8 percent of its supply unlocked, valued at approximately $64.5 million, and it rallied by 45 percent. STRK also saw a 4 percent unlock—worth about $22.75 million—and increased by 22.8 percent. This suggests that liquidity profiles and market maturity aided these tokens in absorbing new emissions with less volatility compared to others.
The market indicates that there is no straightforward correlation between unlock percentage and price movement. More significant factors influencing price include:
- Circulating supply
- Project fundamentals
- Timing
- Investor sentiment
We find ourselves in a robust bull market, where even token unlocks—traditionally perceived as negative events during bear markets—are now viewed through a bullish lens.
Tokens may be rewarded for releasing new supply. If this trend continues, it could mark a pivotal shift in investor attitudes towards unlock events in this market cycle.