The ImmutableX NFT Platform, which just raised $66 million in funding, will put selling pressure on the IMX token.

Key points: 

• ImmutableX will release $66 million worth of IMX tokens in a single unlock event, which will allow early retail investors to sell some of their holdings and potentially lower the token’s price.
• The unlock time is Saturday, November 5th at 13:00 UTC.
• IMX was recently trading at 60 cents, meaning these retail investors could get 500% on their early investments if they decide to sell.
• According to Coinglass, funding rates on most cryptocurrency exchanges have turned negative, meaning traders are overwhelmingly positioned to short IMX token and will be looking to profit from any potential price drop.

ImmutableX, a NFT platform, will release $66 million worth of IMX tokens in a single unlock event, which will allow early retail investors to sell some of their holdings and potentially lower the token’s price.

A total of 110 million IMX, or more than 5% of the total token supply, will be exempt from transfer, an ImmutableX spokesperson said.

The vesting represents a period of time during which investors in company stock or crypto project tokens cannot sell their assets. When the lock-up period expires, investors can exit their holdings, which puts selling pressure on asset prices.

According to the company, the unlock time is Saturday, November 5th at 13:00 UTC.

IMX was recently trading at 60 cents, meaning these retail investors could get 500% on their early investments if they decide to sell.

"Even with the near-term sales, we're not worried about this upcoming release," Immutable co-founder Robbie Ferguson wrote in an email. “The top 30 IMX holders representing 85% of the remaining tokens have committed to holding — many of whom are long-term shareholders of Immutable. For the remaining IMX private sale holders looking to sell, new IMX holders including Coinbase and Kenetic Capital Investors are ready to absorb any selling pressure."

The data for TokenUnlocks, a website that tracks crypto token unlocks, is slightly different. According to the website, 255 million IMX tokens (more than 12% of the total token supply) will be released for transfer on November 5. About 120 million tokens belong to private investors. Another 135 million is for project development, which ImmutableX has committed to lock for at least another year, the spokesperson said.

ImmutableX allows users to create and trade non-fungible tokens (NFTs) cheaper and faster on the Ethereum blockchain. Ethereum is known for its high transaction costs (so-called gas fees) at times when high traffic congests the network. Video game chain GameStop built its own NFT marketplace using the ImmutableX platform, which went live this week.

The project’s parent company, Australia-based Immutable, has raised $260 million in a venture capital funding round from private investors, including Sam Bankman-Frieds Alameda Research, Singapore’s sovereign investment fund Temasek and Chinese tech giant Tencent.

The upcoming 110 million IMX issuance refers to investors in a private token sale that took place before the token appeared on cryptocurrency exchanges in November 2021. According to data on CryptoRank, cryptocurrency prices and analysis sites, these investors bought IMX for about 10 cents.

Expected volatility

Unlock events bring volatility to the market and draw the attention of traders to make money on sudden price swings.

The data shows that traders are betting that the price of IMX will fall as unlocking approaches. According to Coinglass, funding rates on most cryptocurrency exchanges have turned negative, meaning traders are overwhelmingly positioned to short tokens and will be looking to profit from any potential price drop.

Recently, crypto gaming project Axie Infinity witnessed a massive unlocking campaign, releasing $215 million worth of AXS tokens at the end of October. The price of AXS dropped 24% in a week due to the expected unlock. Then, as Axie began to issue tokens, the short squeeze suddenly sent the price up 7%, liquidating the $1.6 million short position.

IMX recently traded at 60 cents, up 4% in the past 24 hours and down 93% from its record price in November 2021, according to CoinGecko.