The imminent release of $2.32 billion worth of vested Arbitrum (ARB) tokens on March 16 has sent ripples of anticipation throughout the cryptocurrency community. The so-called “Cliff Unlock” will see a substantial sum of tokens, around 1.1 billion ARB, being unleashed into the market. This release constitutes approximately 76% of the token’s circulating supply, leading many to speculate on potential price fluctuations for ARB tokens in the coming days.
As the ARB tokens are set to be unlocked, differing opinions have emerged regarding their potential impact on the token’s price. Some traders foresee a rise in short positions against ARB on March 16, while others have already sold their tokens in anticipation of the unlock. Unlocks of this magnitude are often seen as bearish catalysts for cryptocurrency prices. However, there are contrasting viewpoints, with some drawing parallels to instances where tokens experienced price surges following unlocks, such as the case of Solana’s SOL token during a previous cycle.
Arbitrum’s Performance Amid Unlock
Despite the impending unlock, Arbitrum’s native cryptocurrency, ARB, has witnessed a decline in value compared to other leading Layer-2 assets in the past day. While the overall sector has shown a positive trend with an average gain of 3.8%, ARB has underperformed, experiencing a decrease of over 2%. This discrepancy has raised concerns among investors, particularly in light of substantial sell-offs by whales just ahead of the unlock event. SpotOnchain’s analysis reveals that approximately 3 million ARB tokens were offloaded for $6 million, adding to the uncertainty surrounding ARB’s price trajectory post-unlock.
Following the March 16 release, Arbitrum plans to continue unfreezing a certain amount of tokens every four weeks for the next four years. This staggered unlocking process aims to manage liquidity and prevent abrupt fluctuations in the token’s price. In addition to Arbitrum, several other projects are also gearing up to unlock tokens this week, collectively amounting to about $2.7 billion in digital assets. With such a significant influx of tokens entering the market, the cryptocurrency space is bracing for potential market shifts and developments in the days ahead.
As the cryptocurrency market prepares for the massive unlock of $2.32 billion in Arbitrum tokens, investors and traders remain divided on the potential impact on ARB’s price. While some predict a bearish trend due to the unlock event, others point to historical instances where tokens experienced price surges following unlocks. The coming days will reveal how the market dynamics play out and whether ARB can defy expectations amidst the unlocking of a substantial portion of its circulating supply.
