I am very happy to be invited by Binance to become one of the first Chinese content creators. Binance is the exchange that I have always supported the most. It is also a change of place for me to continue communicating with many old friends.
Today, let’s talk about a topic that everyone has always been concerned about and is relatively time-sensitive - whether token unlocking means the beginning of a large-scale market crash
Everyone knows that in the token model of a project, a considerable number of tokens are often locked and will be unlocked according to certain conditions, usually at a certain time point. Since the tokens unlocked by the team are basically free of cost, and the private placement prices of investment institutions are generally very low, the unlocking has long been understood by the market as a big negative.
But is it always like this? Actually, not necessarily. It is even common that the token price explodes when the unlocking date arrives. Why? There is a very important reason, which is the liquidity of the project token in the secondary market, or OTC. For example, if an institution has a large number of unexpired tokens, and is not optimistic about the future market, they do not necessarily need to wait until the expiration date to ship them. They can hedge in advance through futures contracts in the market, or find secondary buyers directly OTC.
A good example of this is ImmutableX ($IMX)
Immutable X is Ethereum’s first ZK-rollup layer 2 protocol for trading and transferring NFTs, with instant transaction confirmation, zero gas fees, and massive scalability that can accommodate 9,000 transactions per second.
It had been popular after its listing because of the luxurious background of its investment institutions, including COINBASE, Naspers, and Galaxy Digital, which are basically considered top-tier. It is particularly worth mentioning that Naspers is a major shareholder of Tencent and has made 1.6 trillion yuan from investing in Tencent.
According to the project roadmap, IMX will release a large proportion of tokens in two days, and 12.7% of the tokens, including team tokens and institutional tokens, will be unlocked (rare even in the cryptocurrency world). Theoretically, it is not an exaggeration to say that a huge pit has been hit, but the price of the currency has not fallen in the past period of time, but has begun to move up.
A closer look reveals several things:
The team has publicly stated that the unlocking of team tokens will be postponed for one year.
The team said that strategic investors agreed not to dump the unlocked tokens into the market and to continue holding them together with the team (just listen to this).
Over the past month, IMX’s contract holdings on Binance have more than doubled from a month ago, from 6 million to 16 million, making it very likely that profits will be locked in early.
As for those who actually hold IMX, they would have run away long ago upon hearing about the 12.7% unlocking. Those who want to sell will not wait until the unlocking.
After analyzing this, I believe that smart friends have understood why the price of IMX has changed. After all, bad news is about to land, and IMX itself has a very good track. NFT is the absolute core of the next bull market. Even if you are really trapped, you don’t have to worry about zero. In this way, IMX has become a good target, so funds will start to enter in advance.
Of course, IMX here is just an example, not a financial suggestion. I hope you can DYOR. In the future, you can use some of the ideas mentioned above to analyze and find the right time to enter the investment.
Finally, here is a very useful tool website link: https://token.unlocks.app/, which is very convenient for checking the token unlocking time of each project.
Finally, I hope everyone can give more likes, attention and support. Brother Lion will provide benefits to early supporters, including but not limited to qualifications for the mute group, WL lottery, etc.
