Unleashing the Avalanche: Impending Token Unlock May Impact AVAX Value

A substantial quantity of AVAX, Avalanche network’s native token, is scheduled to be unlocked within the next month. K33 Research, previously known as Arcane Research, suggests that this event could potentially negatively impact the cryptocurrency’s value. As a result of this prediction, K33 Research has removed Avalanche (AVAX) from its list of most promising crypto assets in the “May Selection Assessment.”

Over $168 Million Worth of AVAX Tokens to be Unlocked

Token Unlocks data indicates that 9,541,800 AVAX tokens – valued at over $168 million based on current prices – are set to be unlocked in less than a month. The unlocking event, slated for May 28, will release approximately 3% of the 327 million AVAX tokens in circulation.

K33 Research’s report anticipates that unlocking these tokens will harm AVAX’s price. Within the same report, the research firm revealed its decision to remove AVAX from the K33-Vinter index – an equal-weighted blend of the most promising tokens among the top 30 crypto assets.

K33’s Vice President explained that the decision to exclude Avalanche’s native token from the index was based on a reassessment of the token’s expected inflationary pressure and ownership concentration. He mentioned that AVAX received a lower Inflation and Ownership Concentration score, resulting in its removal from the Vinter Quality Index.

Data from Token Unlocks shows that over half of the cryptocurrency’s supply remains locked. However, these locked tokens will be released gradually over the next seven years. The final unlock is projected for October 20, 2030.

Avalanche Network Activity Surges Despite Impending Token Unlock

In recent weeks, activity on the Avalanche Network has significantly increased. Token Terminal data reveals that the blockchain’s daily activity improved by 91.5% last month. The platform’s revenue also experienced a remarkable 386% growth within this timeframe.

Nevertheless, this network activity and revenue surge haven’t directly influenced AVAX’s market performance over the past month. In the last 30 days, AVAX has only witnessed a meager 1.7% price increase. One potential reason for this lackluster market performance could be the impending token unlock.

Unlocking AVAX Tokens May Increase Selling Pressure

A K33 Research tweet states that the quantity of AVAX in free-floating circulation will rapidly increase due to the unlocking of tokens for early investors, contributors, and team members. 

Moreover, the consistent and substantial unlocking of AVAX tokens over the next few years is expected to heighten the cryptocurrency’s selling pressure compared to other coins.

This increased selling pressure may be attributed to most investors wanting to cash in on their assets by selling a portion of their unlocks. Consequently, the market should brace itself for the potential impact of the impending AVAX token unlock.

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