Cryptocurrency investors are encountering substantial risks, with approximately $44 billion at stake. This figure far surpasses the nearly $13 billion invested in spot Bitcoin ETFs so far. A prominent issue in the crypto market is tokens starting with a low circulating supply to artificially boost market value, complicating matters for investors.

High Risk in Cryptocurrencies

A report we released recently highlighted that many of the new altcoins listed on the Binance exchange are currently experiencing losses. These altcoins, despite their new listings, began with low supply and frequently unlocked tokens, effectively using individual investors as exit liquidity. For the latest technology news, visit NEWSLINKER.

When institutions invest in early-stage projects, they eventually receive the tokens they were promised at low prices. The market often can't keep up with the rapid unlocking of these tokens, causing prices to stagnate or decline.

For example, DYDX had a circulating supply below 10% in its early days. Its price remained above $20 for a considerable time due to this low supply.

New investors in the cryptocurrency market might suffer significant losses if they choose altcoins without thoroughly researching the circulating and locked supply. This issue could escalate with the increasing number of short-term investors who quickly buy and sell upon seeing reasonable profits.

$44 Billion in Altcoin Unlockings

In 2024, tokens worth $44 billion will be unlocked. This includes altcoins like Altlayer (ALT), Pixels (PIXEL), and ApeCoin (APE) in June. Notable altcoins such as AVAX and DYDX will also see massive unlockings. Crypto analyst Alex Wacy commented:

"This data suggests a large influx of tokens into the market this year. Without sufficient capital inflow, many altcoins might face increased selling pressure. Expect more volatility, a surge in supply, strategic trading opportunities, shifts in sentiment, and long-term impacts from the new tokens entering the market. Adjust your strategy, monitor price changes, and identify optimal selling points to maximize potential gains."

Despite these challenges, some altcoins might thrive by generating demand that exceeds their supply, thereby setting themselves apart positively in the market.

In conclusion, the cryptocurrency market is fraught with significant risks, especially with the upcoming token unlockings. Investors need to stay vigilant, adapt their strategies, and conduct thorough research to navigate these challenges effectively.