- Upcoming token unlock on October 31 could release 17.57% of Celestia’s total supply, potentially impacting market prices.
- Historical data from Solana suggests that significant token unlocks can precede major price increases, despite initial market reactions.
Chris Burniske, a venture capitalist and former crypto analyst, recently discussed the performance of Celestia (TIA), drawing comparisons to the early market movements of Solana (SOL) in 2020.
Now people complaining that $TIA October '24 unlock is too big at 17.57% of total supply, while $SOL unlocked ~80% of its current total supply December 2020. Few here remember much, huh? https://t.co/wHvbLle9Hi pic.twitter.com/JMA6rMPrNf
— Chris Burniske (@cburniske) April 13, 2024
According to Burniske, who is now a partner at Placeholder, despite Celestia’sprice correction, similar patterns were observed with Solana, which initially saw a substantial price drop only to later surge by approximately 10,000% in 2021.
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Currently, Celestia’s token, TIA, is priced at $9.55, marking a 5.6% decrease from its highest recorded price.
This decline has led to concerns and criticisms among investors, especially in light of an upcoming event on October 31 when 17.57% of Celestia’s total token supply will be made available to the market.
Seeing lots of $TIA complainers after the token went ~10x in the public market in ~4 months. Most of these complainers have no clue $SOL also went ~10x in 2020, then sold off 80%, then went 100x+ in 2021. If you can't handle downside volatility, you don't deserve the upside. pic.twitter.com/jplg7eGCbp
— Chris Burniske (@cburniske) April 12, 2024
This kind of token release can lead to potential selling pressure as more units become available for trading.
Burniske also referenced Solana’s experience, noting that in December 2020, around 80% of Solana’s total supply was released, which was followed by significant price increases.
This historical precedent suggests that while immediate market reactions to token unlocks can be negative, they may precede substantial price gains.
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He advised investors to maintain perspective, implying that the ability to endure market downturns without panic selling can potentially lead to significant returns, echoing the price trajectories seen in successful blockchain projects like Solana.
The analysis by Burniske highlights the cyclic nature of crypto markets and the importance of strategic patience in investment decisions.
