TL;DR
- Arbitrum will unlock over $2 billion in ARB tokens, which could spark a huge sell-off.
- The unlock represents 87% of ARB’s current circulating supply.
- Cryptocurrency investors and traders should be cautious about the possibility of a drop in ARB price.
Arbitrum, a prominent platform in the Ethereum ecosystem, is scheduled to unlock over $2 billion in ARB tokens on March 16.
This unlocking, coming from investment contracts, represents a significant portion of Arbitrum’s initial distribution, which could trigger a massive sell-off and affect its market performance.
According to reports from Token Unlocks, 1.11 billion ARB will be released, valued at $2.06 billion at the current price.
This marks an important milestone in Arbitrum’s history, as it is one of the largest single unlocks recorded on the platform.
Additionally, it represents approximately 87% of Arbitrum’s current circulating supply, suggesting a potential flooding of the market with new tokens available for sale.
The distribution of unlocked tokens includes various entities, such as the development team, future teams, advisors and investors.
Importantly, the development team, along with future teams and advisors, will receive 60.5% of the unlocked tokens, allowing them to liquidate 673.5 million ARB, valued at $1.25 billion.
This event could have an impact on Arbitrum’s price and its overall performance in the market
Even though ARB has seen increasing demand due to the popularization of layer 2 solutions for Ethereum Web3 ecosystem, the impending unlock and possible sell-off could destabilize its price and cause a drop in value.
Arbitrum is currently trading at $1.89 per token and is in a consolidation phase on the daily chart.
However, cryptocurrency investors and traders should be cautious and prepared for market volatility in the coming days.
The uncertainty around the impact of unlocking, combined with the unpredictable nature of the cryptocurrency market, underscores the importance of adopting a prudent investment strategy and keeping an eye on market developments.
In this regard, closely monitoring ARB’s performance and adjusting investment strategies accordingly could be instrumental in mitigating the risks associated with this event.
