By
Kseniia Klichova
April 23rd, 2024
Arbitrum is also scheduled to release another 92.65 million tokens on April 16, valued at approximately $155 million at the current market price.
In the fast-paced world of cryptocurrencies, few events can match the significance of a major token unlock. Arbitrum (ARB), a prominent player in the blockchain ecosystem, unlocked a staggering 1.1 billion tokens, valued at a whopping $2.32 billion on March 16.
This move, intended for distribution among Arbitrum’s team, advisers, and investors, has set off a chain reaction in the market. Whales, those large holders of Arbitrum, have wasted no time in responding. As the tokens became available, these whales swiftly began moving their digital assets into various crypto exchanges.
The unlock marked a significant milestone for Arbitrum but also raised questions about its potential impact on the token’s market value and investor sentiment. After the unlock, Lookonchain, a blockchain analysis firm, highlighted the transfer of ARB tokens by numerous major holders.
A minimum of 11 whales were flagged depositing their tokens into exchanges right after the unlock, collectively moving 34 million ARB tokens valued at almost $57 million at the time of writing. This action implies that these whales might be aiming to profit from the unlocked tokens, hinting at a possible bearish outlook in the market.
ARB Exchange Deposit. Photo: Lookonchain
Market Reaction and Price Volatility
ARB/USDT Price Chart. Photo: TradingView
The unlocking event, executed as a “Cliff Unlock”, involved the immediate release of all tokens, a method that typically results in heightened selling activity as holders, including team members and initial investors, aim to cash in their gains.
Despite some optimistic expectations within the community, ARB did not defy the usual trend of price drops following large unlock events. While some hoped it would follow the pattern of previous unlocks that led to price increases, ARB’s performance differed, with its price declining after the unlock event.
Consequently, the price of ARB tokens saw a considerable decrease in the days after the unlock. Starting from a peak of $2.22 on March 13, the token fell to $1.64 on March 18, indicating a 23% decline. Its current value, hovering around $1.70, represents a notable drop from its all-time high of $2.39.
Arbitrum Expected to Unlock More ARB Tokens
In addition to the initial sell-off and price decline, holders of ARB tokens may face further challenges in the near future. According to TokenUnlocks, Arbitrum is scheduled to release another 92.65 million tokens on April 16, valued at approximately $155 million at the current market price.
This additional release of ARB tokens could further impact the token’s price and market dynamics, adding to the uncertainty surrounding Arbitrum’s tokenomics and market performance. As the market adjusts to the influx of newly unlocked tokens, investors and stakeholders will closely monitor the impact on market dynamics and investor sentiment.