Low Liquidity and High FDV Token Unlocks May Trigger Selling Pressure, $155 Billion Expected to Unlock from 2024 to 2030

PANews reported on May 20 that Binance Research stated in a report that the prevalence of high valuation and low initial circulation tokens has been a topic of discussion in the crypto community in recent months. This stems from concerns that such market structures leave little room for sustainable price increases for traders after token generation events ("TGE").

Data from CoinMarketCap and Token Unlocks confirm the growing trend of tokens being issued with low circulating supply and high valuations. Notably, approximately $155 billion worth of tokens are expected to be unlocked between 2024 and 2030. If buyer demand and capital flows do not increase correspondingly, the influx of tokens into the market could create selling pressure.

Factors such as private market capital inflows, aggressive valuations, and optimistic market sentiment have contributed to the trend of issuing tokens with high fully diluted valuations ("FDVs"). The current market landscape requires investors to be selective and prudent when considering project fundamentals such as tokenomics, valuations, and products. Project teams may also need to consider the long-term impacts of decisions related to tokenomics design. Venture capital continues to play a significant role in the crypto industry and can collaborate with project teams to ensure fair supply distribution and reasonable valuations.