Why Sandbox token SAND might drop -20-40% in the next few days
On Feb 14 2023 Sandbox (SAND-USD) will unlock 12.419% of SAND tokens, which makes SAND tokens likely to drop in price as they did in previous unlocks. This event also makes SAND a short candidate for adventures traders. This supply unlock has occurred three times before and resulted in significant drawdowns right after which we will explore in our backward-looking analysis. History might not repeat as this unlock will be a proportionally smaller percentage of the circulating supply than the previous unlocks.
UNLOCK DISTRIBUTION ON FEBRUARY 14 2023
Seed Sale: 103,080,000 SAND (3.44%)
Company Reserve 96,840,278 SAND (3.23%)
Team 71,250,000 SAND (2.38%)
Foundation 39,900,000 SAND (1.33%)
Advisors 37,500,000 SAND (1.25%)
Strategic Sale 24,000,000 SAND (0.80%)
We don’t know with certainty what the above groups will do with their liquid tokens. But, we will explore the possibilities and probabilities in this article and let our readers make up their minds on that possible path.
Our base case is will sell a large enough portion of their total token interest to negatively impact the short-term prices.
Ethereum (ETH-USD) was created out of Vitalik’s frustrations with the world of warcraft video games, and the lack of digital ownership gamers traditionally had to put up with in legacy gaming environments.
We love the idea of the metaverse and gaming finally linking with blockchain technology. We are in the camp that gaming will be immensely important to the crypto industry and will likely be the catalyst that brings in the next wave of innovation and interest from the non-crypto crowd i.e. normies.
However, we are not sold on The Sandbox project. As ex-pro gamers, we currently don’t see anything interesting or of value in the Sandbox environment. Given their massive 500M investments in the blockchain/NFT gaming industry, there could be amazing things in the pipeline we are not aware of, and we hope they come to fruition.
Downward price pressure on the SAND token always follows the unlocked cliffs. History doesn’t have to repeat, but we believe it will likely rhyme, and the impact though less severe than previous unlocks due to diminishing liquid supply impact, will be negative.
This may present a short opportunity for event-driven traders or a lower entry price point for those HODLERS who believe in the Sandbox mission and approach to blockchain gaming. This event can serve as a valuable lesson for those who do not wish to act regardless of any current SAND position. Sitting on the sidelines as an observer is also a respectable option. There will be a cliff in another six months on August 14, 2023, where we can use these February learnings as another data point for our models to inform our actions for the August unlock.
The market is smart and getting smarter. Perhaps going forward thanks to tools like the token unlock website and social media alerts, traders and investors won’t be blindsided by the unlock and will price in the decline of SAND tokens well ahead of the unlock.
We caution against shorting or using leverage for any crypto including SAND due to extreme volatility in this asset class. It is easy enough to get extraordinary gains in this industry without taking on blow-up risk.
UNLOCK DISTRIBUTION ON FEBRUARY 14 2023
Seed Sale: 103,080,000 SAND (3.44%)
Company Reserve 96,840,278 SAND (3.23%)
Team 71,250,000 SAND (2.38%)
Foundation 39,900,000 SAND (1.33%)
Advisors 37,500,000 SAND (1.25%)
Strategic Sale 24,000,000 SAND (0.80%)
We don’t know with certainty what the above groups will do with their liquid tokens. But, we will explore the possibilities and probabilities in this article and let our readers make up their minds on that possible path.
Our base case is will sell a large enough portion of their total token interest to negatively impact the short-term prices.
Ethereum (ETH-USD) was created out of Vitalik’s frustrations with the world of warcraft video games, and the lack of digital ownership gamers traditionally had to put up with in legacy gaming environments.
We love the idea of the metaverse and gaming finally linking with blockchain technology. We are in the camp that gaming will be immensely important to the crypto industry and will likely be the catalyst that brings in the next wave of innovation and interest from the non-crypto crowd i.e. normies.
However, we are not sold on The Sandbox project. As ex-pro gamers, we currently don’t see anything interesting or of value in the Sandbox environment. Given their massive 500M investments in the blockchain/NFT gaming industry, there could be amazing things in the pipeline we are not aware of, and we hope they come to fruition.
Downward price pressure on the SAND token always follows the unlocked cliffs. History doesn’t have to repeat, but we believe it will likely rhyme, and the impact though less severe than previous unlocks due to diminishing liquid supply impact, will be negative.
This may present a short opportunity for event-driven traders or a lower entry price point for those HODLERS who believe in the Sandbox mission and approach to blockchain gaming. This event can serve as a valuable lesson for those who do not wish to act regardless of any current SAND position. Sitting on the sidelines as an observer is also a respectable option. There will be a cliff in another six months on August 14, 2023, where we can use these February learnings as another data point for our models to inform our actions for the August unlock.
The market is smart and getting smarter. Perhaps going forward thanks to tools like the token unlock website and social media alerts, traders and investors won’t be blindsided by the unlock and will price in the decline of SAND tokens well ahead of the unlock.
We caution against shorting or using leverage for any crypto including SAND due to extreme volatility in this asset class. It is easy enough to get extraordinary gains in this industry without taking on blow-up risk.
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