In the next year, a number of cryptocurrency projects will free up large quantities of tokens that were set aside for reserve and community purposes—creating what could be some major supply-side headwinds for the crypto market.

Unfettered by their not-quite-circulating status, there are 8.5 million ETH that could now crisscross the market to affect price dynamics.

In the ever-shifting landscape of cryptocurrency, the year ahead will witness a unique challenge as several projects release substantial quantities of tokens previously set aside for reserve and community purposes. This move, while crucial for a project’s development, might also bring forth significant supply-side headwinds, particularly in the current market climate.

Among the projects preparing for noteworthy token unlocks in the next 12 months are $CONX, $GUN, $PARTI, $BMT, $AI, $WLD, and $ELX. Together, these projects will be introducing a total of more than $1 billion in tokens back into circulation. To put this into perspective, if we were to convert all of these tokens to US dollars at their current market prices, the total value would be approximately $866 million. In essence, this sum is almost half of the entire cryptocurrency holdings reportedly held by U.S. retail investors.

Unfettered by their not-quite-circulating status, there are 8.5 million ETH that could now crisscross the market to affect price dynamics. They are 8.5 million ETH—which, if every last one of them were to be folded back into the market, might statistically amount to half of what retail investors are now holding—more than enough to upset the market for small-token floats.

Of course, internal token unlocks are not always associated with immediate price drops or token dumps. However, a “next-level” understanding of not just these unlocks, but also of their scale relative to the current circulating supply, can help us investors gauge the real risks. This is especially true in projects with some mix of: (1) aggressive emission schedules; (2) a near-term number of actual tokens that have a minimal market float.

$CONX and $GUN: High Risk, High Supply Impact

The next year will see the most spectacular unlocking for $CONX, with a stunning $507.3 million in tokens up for release—equivalent to a breathtaking 2,050% of its current circulating supply. While this supply should already be technically unlocked, it hasn’t yet entered the actual circulating market. The actual unlocking could cause major price disruption. If demand doesn’t keep pace, $CONX could experience some rough seas ahead. Holders and watchers of $CONX, prepare for volatility times two.

Next in line is $GUN, with $65.75 million in tokens set to unlock, constituting 171.9% of its circulating supply. Here we have an extreme case of a low float token facing a high emission curve. With a fully diluted valuation (FDV) that is hard to fathom and a limited supply to work with, any upward move in GUN’s price could see an equally large down leg when one factors in that unlocked tokens serve as a makeshift treasury for the GUN project.

Mid-Cap Pressure: $PARTI, $BMT, and $AI

Mid-cap projects are also witnessing substantial unlock events that could remodel their supply dynamics. $PARTI is about to distribute $97.96 million worth of tokens, which is equivalent to 109.9% of its circulating supply. In effect, this means that more than double the currently tradable amount of $PARTI could be in circulation within a year. For investors, that’s pointing to potential dilution of our assets unless we see some equally aggressive growth in the ecosystem or demand that would absorb all those tokens.

In the same way, the token with a smaller market cap, $BMT, faces an unlock of $27.95 million—equal to 102.8% of its circulating supply. Small-cap tokens are usually more vulnerable to unlocks because they have thin order books and very little liquidity. Even moderately heavy distribution can lead to an unlock that feels like a concentrated dump. And unless the project has a clear, staggered release mechanism, this is likely to happen, with the manner of the unlock ensuring that it feels like some sort of concentrated dump.

Next is $AI, another project that’s gaining attention with the rise of AI in Web3. Yet, it has $25.07 million in reserves, and community tokens that are set to be unlocked constitute 99.4% of the current supply. While the AI sector is surging, $AI’s supply could very well outstrip its demand unless the token’s adoption and utility burgeon in kind.

Long-Term Emissions: $WLD and $ELX

Although it is not as extreme in relative terms, WLD leads in absolute value with 1.15 billion dollars worth of tokens that are scheduled to be unlocked, representing 88.6 percent of its circulating supply. The difference here is its slow emission model, which distributes the tokens in a consistent, monthly curve. Whereas sudden shocks to supply cause immediate price impacts (as seen with BICO), a long