Altcoin Market Braces for Increased Volatility Amid $3 Billion Token Unlocks

The altcoin market is set to experience heightened volatility this week, with $3 billion worth of major token unlocks scheduled. Among these, Ondo Finance’s ONDO token has drawn significant attention due to a substantial increase in supply.

According to CoinDesk on January 13, the upcoming token unlock events, including Ondo Finance’s ONDO token, are expected to introduce significant fluctuations to the altcoin market.

Data from Tokenomist reveals that this week’s unlocks—spanning Ondo Finance (ONDO), Arbitrum (ARB), StarkNet (STRK), and Sei (SEI)—amount to $3 billion, marking the largest scale since November 2023.

A major contributor to this figure is Ondo Finance, a decentralized tokenization platform.

On January 18, Ondo Finance is set to unlock approximately 1.94 billion ONDO tokens, valued at $2.23 billion. This represents over 130% of the current circulating supply of 1.4 billion tokens and far exceeds the daily trading volume of $250–300 million.

Token unlocks refer to the lifting of “lockup” restrictions, which prevent early investors and project teams from selling large quantities of tokens in the early stages. To mitigate abrupt price swings and market instability, unlocks are typically implemented gradually.

However, large unlocks exceeding circulating supply or daily trading volume, as seen with ONDO, can lead to market volatility. Research from The Tie suggests that token unlocks equivalent to 100% of daily trading volume often result in notable price fluctuations before and after the event.

ONDO has seen a downward trend since peaking at $2.10 on December 16. Currently priced at $1.14, it has dropped to its lowest level since December 2, with declines of 8% in a day and 40% over the past month.

Market participants are closely monitoring the effects of this week’s token unlocks, particularly those of ONDO, as they could shape short-term sentiment in the altcoin market.