The Wolf Den #1056 - Unlocks Are Coming—Beware
Check your coins.
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In This Issue:
Unlocks Are Coming—Beware
Bitcoin Thoughts And Analysis
Legacy Markets
This Many Voters Care About Crypto
Goodbye Gurbir Grewal
The SEC Is Appealing The XRP Decision
Bitcoin Crashes, But October Still Could Be Explosive [Buy The Dip]
Unlocks Are Coming—Beware
Token unlocks are a natural and essential component of a cryptocurrency's lifecycle, strategically designed to release previously locked tokens into circulation over time. These unlocks are often tied to project milestones, investor agreements, or team incentives, serving to manage token supply while supporting liquidity.
The structure of token unlocks can significantly influence a project, potentially leading to dramatic short-term outcomes. When executed poorly, unlocks can disrupt market dynamics and investor confidence.
The darker side of unlocks lies in their potential to destabilize token prices and market sentiment. While they are meant to facilitate growth and project development, poorly timed or overly aggressive unlocks can flood the market with excess supply, resulting in sharp price declines. Early backers or large investors may dump their unlocked tokens for profit, triggering sell-offs that erode confidence in the project. This sudden surge in liquidity not only dilutes the token’s value but can also cause long-term damage, as retail investors often bear the brunt of these rapid market movements. Instead of driving growth, such unlocks can fuel volatility and uncertainty, derailing a project when momentum is critical.
Several notable unlocks are approaching this month, marking the beginning of a series of scheduled releases. This makes it an opportune time to closely examine the full spectrum of these events—the good, the bad, and the ugly. If you think this doesn’t concern you, here’s a brief list of tokens with unlocks this month: SOL, TIA, WORLD, ENA, SUI, IMX, ZETA, NEON, ADA, DYDX, MAV, MODE, AVAX, SEI, NEAR, DOT, DOGE, BEAM, and FILE.
Chances are, these unlocks impact many of you.
Attempting to cover every single unlock in detail would be overwhelming, but I’ll provide an overview of key scenarios that are currently playing out and will continue to unfold. This should offer clarity on what’s happening and what to expect moving forward.
Let’s start with SUI, a hot topic in the crypto community, which already completed its unlock this month. On October 1st, SUI released 64.19 million tokens—worth approximately $108 million at the time—representing around 2.4% of its circulating supply. Despite the substantial unlock, SUI holders can breathe easy, as the token remains up for the week and continues to perform well in current market conditions.
Many SUI holders likely didn’t even notice the token unlock, which is a positive sign.
Next up is Aptos, set to release 11.3 million APT tokens on October 11. This represents 2.2% of the circulating supply, worth around $90 million. I expect APT to mirror SUI’s performance, though perhaps not quite as strongly. The best-case scenario would be for this unlock to coincide with a rising market, allowing the new supply to be absorbed smoothly. Regardless, a 2% supply increase isn’t likely to cause significant disruptions.
The unlock I want to emphasize most is the upcoming TIA unlock on October 30th. Celestia is preparing for an unprecedented event, and it’s hard to overstate its significance. To put it plainly, I can't recall an unlock of this scale before. Here are the details: 175.56 million TIA tokens, valued at approximately $895.36 million, will be released—representing a staggering 82% of the circulating supply. This is exactly what I was referring to when I mentioned the "sinister" side of unlocks earlier.
From a basic economic standpoint, a supply increase of this magnitude should result in a substantial sell-off. However, it's worth noting that the market may have already begun pricing this in, as the chart has been trending downward ahead of the unlock. While it’s difficult to predict the precise impact of the October 30th event on TIA, my gut tells me the path forward will be challenging. Below is the lifetime chart of the asset.
Given that TIA is such an extreme case, I took a deep dive into the official documentation on its tokenomics to understand how the asset ended up in this position. If you’re curious, locating these documents is usually quite simple—you typically just need to find the asset’s white paper and search for terms like “governance” or “supply.” Below are all the official images.
It's clear that insiders were heavily favored in the supply distribution. Executives often make these decisions by establishing vesting periods that lock up the majority of the tokens, enabling the small remaining float to see rapid value increases with minimal buying demand. The trade-off, however, is the significant unlock that comes later. Ideally, the market would grow enough for the small float to absorb the incoming tokens—but in TIA's case, I don't see how that's realistically possible.
What concerns me about this distribution is that there’s basically just one slice of the pie left for those who aren’t insiders or early participants. What’s the point of a token if 80% of it is allocated to “early supporters,” “first core contributors,” “the foundation,” and “core devs?” Take a wild guess at who ends up paying the price with this structure.
Above is the last image Celestia provides on this topic—quite basic. From an outsider's perspective, there isn't much information to glean from it all; however, I believe this is a critical subject. And for the record, my intention isn’t to criticize any project but rather to share my thought process when evaluating these issues. This way, you’ll have a framework to apply to any token that I’m not discussing here.
One last (Celestia) image provided by CoinMarketCap:
Before wrapping up, I want to cover Solana, as it’s the most relevant token for all of you due to its size and popularity.
Looking at the images above, it's evident that the Solana team has made some solid decisions, which explains its strong performance this cycle. While no solution is perfect, Solana has clearly taken a thoughtful approach to token allocation. With less than 10% of its supply left to unlock, it’s in a strong position, especially at this point in the market cycle.
This October, Solana is set to unlock 524.03 million tokens, valued at $81.56 million, which accounts for just 0.11% of its total supply. Any article you see warning about a "massive Solana unlock" is just trying to grab attention for clicks.
Anyone holding an altcoin other than Ethereum should take the time to understand their investment’s tokenomics and unlock schedule. It’s as simple as going to CoinMarketCap.com, searching for the asset, and scrolling down to the token unlocks section. Then, find the asset’s white paper to identify who owns what.
The last thing any crypto investor should do is hold assets that will have their growth stunted by large unlocks every month for the next year or more.
So, check now or forever hold your peace.
Bitcoin Thoughts And Analysis
Bitcoin continues to dance around the blue 50 MA, still holding as support. It broke $60,000 temporarily but has managed to hover above since. Regardless, bulls are not showing much immediate strength.
Bitcoin confirmed bullish divergence with oversold RSI, just as predicted yesterday. However, it was immediately followed by hidden bearish divergence, meaning we still need to watch and wait. As you know, I like to look for divergences to build, which means we would likely get another, bigger divergence if price closes with another lower low. This could also give us divs on higher time frames, building from lower to higher. This appears to be bottoming in this area.
Legacy Markets
US equity futures fell as concerns over escalating Middle East conflict weighed on investor sentiment, while traders awaited key US economic data for clues on the Federal Reserve's next move. Crude oil prices continued to rise amid geopolitical risks, with Brent crude nearing $75 per barrel.
Investors are watching Israel's response to a missile strike by Iran, which has increased uncertainty in the markets. Global equities are headed for their first weekly loss in four weeks, with US-listed Chinese stocks also down after recent gains. In company news, Levi Strauss shares slumped after lowering its full-year revenue forecast.
JPMorgan forecasts a 125,000 increase in US non-farm payrolls, with the labor market data set to influence expectations for potential Fed rate cuts. Fed officials, including Richmond's Tom Barkin, noted progress on inflation but emphasized caution regarding further rate decisions.
Meanwhile, European stocks dropped, led by declines in France’s CAC 40 after President Macron supported a temporary tax on large companies. Additionally, the British pound fell sharply after Bank of England Governor Andrew Bailey hinted at potential rate cuts. Concerns over energy supply disruptions due to Middle East tensions also contributed to market volatility.
Key events this week:
US nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 7:50 a.m. New York time
Nasdaq 100 futures fell 0.3%
Futures on the Dow Jones Industrial Average fell 0.2%
The Stoxx Europe 600 fell 0.4%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro was little changed at $1.1042
The British pound fell 1.2% to $1.3114
The Japanese yen was little changed at 146.61 per dollar
Cryptocurrencies
Bitcoin fell 0.2% to $60,770.62
Ether fell 1.3% to $2,353.83
Bonds
The yield on 10-year Treasuries advanced two basis points to 3.80%
Germany’s 10-year yield advanced five basis points to 2.14%
Britain’s 10-year yield declined two basis points to 4.01%
Commodities
West Texas Intermediate crude rose 1.5% to $71.12 a barrel
Spot gold fell 0.4% to $2,648.31 an ounce
This Many Voters Care About Crypto
I recently came across an article with the title above, and my immediate reaction was, *is this really true?* The claim is that nearly half of U.S. voters—49%—"support pro-crypto policies and consider it important in determining who they vote for." As much as I'd love for this to be accurate, and while I hope my instincts are wrong, this figure feels unusually high. After digging into the details, I found the study behind the claim, and here’s what I discovered.
The research was conducted by Consensys in collaboration with HarrisX, a well-known research and analytics company. They gathered data from Pennsylvania, Michigan, Wisconsin, and Texas, with a sample size of 1,664 registered voters across these states. Below are a couple of key sentences explaining the survey’s methodology to mitigate bias. While the methodology seems sound, I believe the primary concern lies in the relatively small sample size.
“Respondents for this poll are recruited through optin, web-panel recruitment sampling. Recruitment occurs though a broad variety of professional, validated respondent panels to expand the sampling frame as wide as possible and minimize the impact of any given panel on recruiting methods.”
“The results reflect a geographically representative sample of registered voters. Results were weighted for age, gender, region, area type, race/ethnicity, income, political party, education, Cryptocurrency ownership, ideology, and 2020 vote choice where necessary to align them with their actual proportions in the population.”
If we look past the issue of size, the results do indicate that a large amount of voters care about this space:
There are a lot more cool graphics, so if you want to see the study, click HERE.
Goodbye Gubrir Grewal
Gurbir Grewal, the SEC’s Director of the Division of Enforcement, has been replaced by Sanjay Wadhwa, a 21-year agency veteran, who will serve as acting deputy director. For those unfamiliar, Gurbir was a notable anti-crypto regulator during his tenure at the SEC, frequently advocating for stricter enforcement actions against crypto projects and platforms.
In the press release announcing his departure, the following was stated: “Under Mr. Grewal’s leadership, the Division recommended and the Commission authorized more than 100 enforcement actions addressing widespread noncompliance in the quickly growing crypto space, including against the operators of the largest crypto asset trading platforms in the world and the operator of the largest crypto asset trading platform in the United States for depriving investors of crucial investor protections by not complying with the registration provisions of the federal securities laws.”
It’s a complicated situation. Back in July, Gurbir argued that crypto was specifically harming minority communities, stating, “Another response to this decline in trust has been the ‘predatory inclusion’ tactics of crypto entities directed at Black, brown, and other marginalized communities.” While the exact reason for his departure is unclear, it’s hard to overlook the immense pressure Gary Gensler is under from both sides of the political aisle. Republicans are frustrated with his regulatory approach, while Democrats worry that his actions may be losing them voter support.
As of now, I’m unsure where Sanjay Wadhwa stands on crypto—let’s just hope he isn’t as tough as Gurbir.
The SEC Is Appealing The XRP Decision
The SEC has officially decided to appeal the court ruling in the Ripple case, days before the deadline to do so. Last year, Judge Analisa Torres ruled that secondary XRP sales were not considered securities, a decision seen as a major victory for Ripple. However, the distinction between programmatic and institutional sales has sparked controversy, prompting the SEC to challenge the ruling. This should be all the evidence needed to know that the SEC won't stop at anything to destroy this industry until its key decision-makers are gutted from the inside out. It’s a shame this is coming back, but another reason why the U.S. needs a pro-crypto president who will see the SEC for what it is and remove Gary Gensler.
Here is a statement from Brad Garlinghouse, the CEO of Ripple:
“If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC.
Somehow, they still haven't gotten the message: they lost on everything that matters. Ripple, the crypto industry, and the rule of law have already prevailed.
While we'll fight in court for as long as we need, let's be clear: XRP’s status as a non-security is the law of the land today - and that does not change even in the face of this misguided - and infuriating - appeal.
(Remember, when the SEC tried unsuccessfully to file an ‘interlocutory appeal’ they made clear they had no intention of challenging XRP’s status as a non-security.)”
All this makes me wonder if there is any connection between this announcement and the Gurbir news that came an hour before it.
Bitcoin Crashes, But October Still Could Be Explosive [Buy The Dip]
Join Markus Thielen from 10x Research as we explore what is behind the recent dip and whether Bitcoin will meet the "October" expectations.
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.
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