Token Unlocks Impact

Definition ∞ Token unlocks impact refers to the market effects observed when previously restricted or locked digital tokens become available for trading or transfer. These tokens are often held by project teams, early investors, or advisors under vesting schedules. The release of a large volume of tokens into the circulating supply can increase selling pressure, potentially leading to price depreciation if demand does not absorb the new supply. This event can significantly alter a token’s market dynamics.
Context ∞ The impact of token unlocks is a recurring theme in cryptocurrency news and market analysis, particularly for newer projects with significant portions of their supply still locked. Traders and investors closely monitor unlock schedules to anticipate potential price volatility. Discussions often center on whether the market has adequately priced in an upcoming unlock event and the project’s ability to generate sufficient demand to absorb the additional supply.