Major Arbitrum Holders Shift Assets to Exchanges After Large Token Unlock Causes Price Drop
Summary:
Following the release of a large number of staked Arbitrum (ARB) tokens on March 16, large-scale investors have begun transferring their holdings to cryptocurrency exchanges. The move came after Arbitrum released 1.1 billion ARB tokens, amounting to $2.32 billion. The substantial drop in ARB's price resulted from these actions, and further decline may occur with the scheduled release of an additional 92.65 million tokens on April 16.
Post the release of a vast quantity of staked tokens on March 16, big fish who own Arbitrum (ARB) have begun to transfer their crypto holdings to exchanges. At least 11 giant asset holders were found to have shifted their tokens into exchanges following the release, as flagged by blockchain analytics agency Lookonchain on March 18. Together, these asset holders deposited 34 million tokens into exchanges, an amount equivalent to nearly $58 million at the time.
This followed a sizable release of tokens by the secondary layer blockchain venture. Arbitrum freed up 1.1 billion ARB tokens, valued at $2.32 billion, on March 16. Token Unlocks, a crypto vesting tracker, showed that a total of 673.5 million tokens were released for Arbitrum's advisors and team members, with an additional 438.25 million tokens released for investors.
The venture performed a "Cliff Unlock", meaning all the tokens were released simultaneously, prompting speculation that many token holders would bet against the token. Some token holders went on to disclose their ARB sales on social media platforms, while others remained optimistic that the token wouldn't take a nosedive. A few community members expressed the hope that the token would follow suit from previous vesting release episodes, when prices trended upwards instead of down. However, ARB didn't follow this pattern.
In the run-up to the token release, ARB's price followed a downward trajectory. The token hit a peak of $2.22 on March 13, only to fall to $1.84 on the day of the release, March 16. By March 17, it had slumped further to hit a seven-day low of $1.64. At present, the token's value has settled around the $1.70 mark, a drop of nearly 29% from its historic peak of $2.39 achieved on January 12.
Alarmingly for holders, the slump in price, which has already seen a 23.42% fall due to the unlocked tokens, might not be over yet. Token Unlocks reveals that Arbitrum is set to relinquish another 92.65 million tokens on April 16. Worth approximately $157 million based on current market rates, these tokens will all be released simultaneously to the Arbitrum team, its advisors and its investors.
Published At
3/18/2024 11:26:37 AM
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