Summary
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Major Token Unlock Approaching: Donald Trump’s Solana-based meme coin, TRUMP, is set to undergo its first token unlock on April 18th, releasing approximately 40 million tokens worth an estimated $320 million into the market initially, followed by daily unlocks until July.
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Potential for Price Decline: Experts predict the token unlock could exert downward pressure on TRUMP’s price due to an increase in circulating supply, traditionally a bearish signal requiring increased demand to maintain value, and investors reacting to the coin’s 36-month unlock schedule.
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Unique Investor Base as a Counterfactor: Despite bearish predictions, the article notes that TRUMP attracted a unique base of new crypto users, which could potentially mitigate the expected price decline as their holding behavior might differ from typical crypto investors.
The Solana-based meme coin associated with Donald Trump is approaching a significant milestone: its first token unlock event.
Next Friday, the team behind the Official Trump (TRUMP) project is scheduled to receive approximately 40 million TRUMP tokens.
According to data from the crypto analytics platform Tokenomist, this unlock will release tokens valued at around $320 million into the market, based on TRUMP’s current trading price.
Starting April 18th, roughly $4 million worth of TRUMP tokens will be unlocked each day.
This daily unlock schedule will continue until the next major unlock event, slated for July.
Impending Token Unlock of 40 Million TRUMP
The central question now is: how will this initial unlock affect the market value of this cryptocurrency linked to the former president?
Bearish Outlook Due to Increased Supply
Sidney Powell, co-founder and CEO of DeFi lending platform Maple Finance, suggests this event could exert downward pressure on the coin’s price.
Speaking to Decrypt on Friday, Powell explained that token unlocks are typically considered bearish indicators.
This is because they increase the available supply of an asset, reducing its scarcity.
Maintaining current price levels then necessitates a corresponding increase in demand.
Powell noted that while the size of TRUMP’s impending token release is not exceptionally large compared to other projects, the price of the meme coin could still decline.
Investors may react to the implications of Trump’s planned 36-month unlock schedule, which will progressively expand the total circulating supply of TRUMP.
Initially, there were just 200 million tokens at launch, but the ultimate goal is to reach 1 billion TRUMP.
Gradual Unlock vs. Market Sentiment
“A more abrupt, large-scale unlock might be cause for greater alarm,” Powell commented, differentiating gradual unlocks from sudden influxes.
He added, “However, it’s clear that as tokens become available through the unlock process, increased selling activity is likely.”
Unique Investor Base Could Influence Price Action
On the other hand, TRUMP’s holder base possesses unique characteristics.
Blockchain analytics firm Chainalysis reported in January that TRUMP initially attracted a wave of newcomers to the crypto space.
Many wallets acquired TRUMP as their entry point into altcoins on the Solana network.
The cryptocurrency industry viewed the launch of TRUMP as a significant event that brought mainstream users into the crypto ecosystem.
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