Current inflows into altcoins are insufficient to offset some of the big token unlocks and selling pressure from VCs.
Profit-seeking venture capitalists (VCs) are bad for the long-term sustainability and price action of newly-launched cryptocurrencies.
Despite bringing new liquidity for altcoin launches, VCs introduce significant sell pressure that damages the token’s long-term price action, according to popular crypto analyst Route 2 FI, who wrote in an April 22 Substack post:
One of the main issues with the current token launch trend is their initially high fully diluted valuation (FDV), which promises big airdrop allocations for early adopters but comes with large unlocking schedules for early VC investors. This mechanism will lead to a price decrease for most of these new tokens. According to Route 2 FI:
