The Crypto Market Braces for a Historic Token Unlock, Led by Ondo Finance's Release of $2.23 Billion Worth of ONDO Tokens

The week promises to be eventful in the crypto market with a historic unlocking of tokens estimated at 3 billion dollars, the largest since November 2023. At the heart of this event, Ondo Finance is set to release 1.94 billion ONDO tokens on January 18, representing more than 130% of its current circulating supply.

A massive unlocking that worries the market

The crypto market is preparing for a crucial week starting January 13, 2024. According to data from Tokenomist, several major projects including ONDO, ARB, STRK, and SEI will participate in this massive unlocking.

Ondo Finance, a platform specialized in asset tokenization, is leading the way with a planned release of 1.94 billion ONDO tokens, valued at 2.23 billion dollars. This colossal amount greatly exceeds the daily trading volume of the token, which currently fluctuates between 250 and 300 million dollars.

In the face of this potential selling pressure, the price of ONDO is already showing signs of weakness. The token is trading at 1.14 dollars, its lowest level since early December, down 5% over the last 24 hours and 15% since the beginning of the month. This downward trend began after reaching an all-time high of 2.10 dollars in mid-December.

Impact and Outlook on the Crypto Ecosystem

The unlocks of tokens are an essential mechanism in the crypto ecosystem, enabling a gradual distribution of tokens to early investors and development teams. This approach traditionally aims to prevent massive dumps and maintain some price stability. However, the exceptional scale of the unlocking scheduled for this week raises legitimate concerns.

A recent study by The Tie highlights that tokens facing unlocks exceeding 100% of their average daily volume generally experience high volatility before and after the event. In the case of ONDO, the ratio between the unlocked volume and the daily trading volume suggests a particularly turbulent period ahead.

The impact of this mega-unlocking could reverberate throughout the altcoin market, creating opportunities for savvy traders, but also increased risks for less experienced investors. The coming days will be crucial in assessing the market’s capacity to absorb this massive offer of tokens.