The TIA token, associated with the Celestia network, has recently suffered a dramatic downturn, ranking as the second worst performer among the top 100 cryptocurrencies in market capitalization over the past week. Once valued at $6.24 on September 25, TIA’s price has plummeted to about $4.86, largely due to significant unlocking events expected to happen soon.
What Causes the TIA Token Drop?
The sharp decline is directly linked to the scheduled unlocking of 175.56 million TIA tokens at the end of this month. Research from Messari indicates that this unlocking will release around 82% of the total circulating supply, estimated at approximately $853 million. Historically, token unlocks exceeding 5% of supply often lead to sudden price drops, and the current figures far surpass that threshold. Furthermore, the prevailing lack of interest in altcoins could exacerbate liquidity problems.
What Is the Unlocking Schedule for TIA Tokens?
Messari outlines that this unlocking event initiates a series of monthly releases planned over three years. From November 2024 to October 2025, about 30 million TIA tokens will be unlocked each month. This will taper to at least 9.7 million monthly from November 2025 to October 2026, and finally, 5.1 million from November 2026 to October 2027. Such token unlocks have previously led to significant price fluctuations, as seen in the case of DYDX.
Investors may have taken the opportunity to secure profits, resulting in the current volatility. Key takeaways include:
- The unlocking of 175.56 million TIA tokens is expected to lead to drastic price movements.
- 82% of the circulating supply will be released, raising concerns about liquidity.
- Monthly unlocks will continue for three years, potentially affecting market stability.
The recent developments are likely to have profound implications for the TIA token’s market performance and the broader Celestia network. The potential for volatility may attract traders seeking immediate profits, thereby influencing the token’s ecosystem moving forward.