The altcoin market is expected to see additional volatility this week, as a number of tokens are set to be unlocked, which will release billions of dollars in supply for several coins, including Ondo Finance’s ONDO token.
According to data from Tokenomist, the value of token releases this week, which include names like ONDO, ARB, STRK, SEI, and others, has reached $3 billion, the largest amount since November.
DeFi platform Ondo Finance’s ONDO token represents a significant portion of this total. On January 18, the company will launch 1.94 billion ONDO tokens worth $2.23 billion, over 130% of the total circulating supply of around 1.4 billion tokens.
This upcoming release of ONDO tokens is several times the daily trading volume of the token, which has recently ranged between $250 million and $300 million.
imminent fluctuations
Token releases refer to the gradual release of coins that were initially frozen to prevent early investors and project team members from selling them all at once. This approach helps avoid rapid volatility and market instability.
Token releases can lead to sharp price fluctuations, especially if the amount released is large compared to the daily trading volume, which can put pressure on prices in the absence of sufficient demand. Some investors also view these releases as an opportunity to enter or exit the market based on their investment strategies, reflecting the impact of these events on the balance of supply and demand in the market.
However, in some cases, such as with ONDO token releases, the release volume may exceed the circulating supply or average daily trading volume of the coin, threatening to cause market volatility. According to research by The Tie, tokens that experience releases equivalent to 100% of average daily trading volume typically experience significant volatility before and after the release.