APTOS (APT), a prominent digital asset, has witnessed a significant downturn, falling 16% over the past week and currently trading at $11.91, according to CoinMarketCap. This decline starkly contrasts with the general upward trend observed in other major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
The drop in APT’s value is largely attributed to the upcoming release of approximately $351 million in tokens. Key stakeholders, including core contributors, investors, community members, and the ecosystem development foundation, are set to receive substantial token unlocks. Specifically, the allocations are $141 million to core contributors, $100 million to investors, $38 million to community members, and $16 million reserved for the ecosystem development foundation.
This token unlock is a strategy many cryptocurrency entities employ to mitigate the risk of insider dumping. Despite such measures, it’s common for asset prices to experience volatility both before and after the unlocks due to the anticipated increase in sell pressure as these new tokens become liquid.
The unlock, scheduled around April 12, is expected to make nearly 25 million tokens available. While these tokens represent only 6.24% of the current circulating supply, they nearly double the daily trading volume observed on exchanges. This significant influx of available tokens is causing concern among investors, who fear that the increase in supply might surpass the existing demand, potentially leading to further declines in the token’s value.
Market analysts note that while the APT’s forthcoming token unlock aims to prevent market manipulation by insiders, the short-term effects could lead to increased market volatility. Investors are advised to exercise caution, as the actual movement of assets post-unlock could take between one to two days, which might contribute to unease and speculative trading.
As the date approaches, the APTOS community and potential investors are watching closely, ready to navigate the market fluctuations that such a significant token release might precipitate. The outcome of this event could serve as a critical indicator of the market’s capacity to absorb new supplies without detrimental impacts on token value.
