Avalanche’s AVAX Underperforms Ahead of $365M Token Unlock

The
native
cryptocurrency
of
the
Avalanche

(AVAX)
network
underperformed
most
digital
assets
as
the
token
undergoes
a
$365
million

unlocking
event
this
week
that
will
increase
the
token’s
supply.

AVAX
dipped
more
than
3%
over
the
past
week,
while
most
cryptocurrencies
–
148
of
the
173
constituents
of
the
broad-market
CoinDesk
Market
Index
(CMI)
–
gained
in
price.
The
CoinDesk20
Index
(CD20),
which
tracks
the
performance
of
the
largest
and
most
liquid
crypto
assets,
advanced
6%
during
the
same
period.
At
press
time,
AVAX
changed
hands
at
$38,
some
23%
lower
than
its
December
high.

The
underperformance
happened
as
some
9.5
million
of
previously
locked-up
AVAX
tokens,
worth
$365
million,
will
be
released
on
Thursday,
increasing
the
asset’s
circulating
supply
by
roughly
2.6%,
according
to
data
from
Token.Unlocks.

Some
4.5
million
tokens
will
be
transferred
to
team
members,
2.25
million
to
strategic
partners,
1.67
million
to
the
ecosystem
development
foundation,
while
1.13
million
are
earmarked
for
airdrop.

Approximately
58%
of
all
of
AVAX’s
tokens
have
been
unlocked,
on-chain
data
shows.

Token
unlocks
translate
to
an
increase
in
the
asset’s
supply,
releasing
previously
locked-up
coins
from
a
vesting
period,
including
to
early
investors.

Large
unlocking
events
usually
lead
to
price
declines
within
two
weeks
due
to
the
supply
increase
outpacing
investor
demand
for
the
asset,
a

report
by
crypto
analytics
firm
The
Tie
found
last
year.