<style>.lazy{display:none}</style>When to sell a cryptocurrency airdrop? | Money Investors

When to sell a cryptocurrency airdrop?

Avatar photoAugus Curtis
Cryptocurrencies
Airdrop crypto

Key facts:
14 days seems to be a key number to keep in mind.It all depends on market conditions, so no infallible rule can be established.

A recent analysis carried out by CoinGecko has shed light on an important issue for those interested in cryptocurrency airdrops: When is the best time to sell these tokens received for free and ensure maximum profits?

The results suggest that, on average, the period of 14 days after the airdrop is crucial, although the variability of the market does not allow infallible rules to be established.

The study revealed that 46%, or 23 of the 50 largest airdrops, recorded peak prices for their tokens in the first 2 weeks after their launch. This data highlights the importance of the initial period for those who want to maximize their profits. 

This indicates that the tokens tend to see a significant increase in interest and value once they begin trading on the market. “This phenomenon supports the idea that airdrops are effective marketing and growth tactics for cryptocurrencies,” notes CoinGecko.

Precisely, airdrops are designed as a reward for community loyalty and to boost participation in the network, something that has worked so far, according to what is explained in the report.

The token airdrops that have experienced the highest increase in price in the short term are: Ethereum Name Service (ENS) had an increase of 73% two days after starting trading, X2Y2 (X2Y2) had an increase of 121 % on day two, Blur (BLUR) reached 90% on day 6, LooksRare (LOOKS) 192% by day 10 and the one that stands out the most is the airdrop of ArbDoge AI (AIDOGE), whose token that reached have 425% increase by the 14th.

The following graph shows the different airdrops and the time they reached their maximum price.

Time in which the top 50 airdrop tokens reached their maximum price. Source: CoinGecko.

The analysis also notes that in 7 airdrops, token prices peaked on the same day of launch and those assets subsequently failed to recover.

An example is the airdrop of the Jupiter decentralized exchange based on the Solana network. This delivery of tokens was valued at 700 million dollars, thanks to the distribution of 1,350 million JUP tokens, as reported by Market Times.

See also
For everyone who has some knowledge of cryptocurrencies, the volatility of the famous Bitcoin is more than obvious. Even so, it is common that not everyone is familiar with the subject, so if you are one of those people who is interested in investing in Bitcoin, but do not know the reason for such volatility, then you are in the right place. In this section we will briefly explain the reasons why Bitcoin has a volatile price fluctuation . Of course, keep in mind that the fate of Bitcoin is the same as that of many digital currencies that are in the market as a general rule, therefore, it is common to see that, if BTC goes down or up, the others do too. Why is Bitcoin so volatile? 1. The lack of regulation as one of its causes . There is a basic concept in the crypto world that talks about the decentralization of Bitcoin and the fact that it is a digital currency that is not regulated under any government entity; this means that there is no one who can regulate the value it has, nor can they do anything to control its falls or rises. So, this decentralization and lack of control is one of the main reasons why its price is so volatile . However, this little or no regulation is the main attraction for which investors see it as a very attractive electronic currency and, if regulations were to appear, this interest could decrease, therefore, it is a difficult factor to remedy. By the way, if you are looking to invest in cryptocurrencies or see the bitcoin price in real time , we recommend you visit KuCoin, a trusted Exchange platform where you can trade BTC or any other digital currency. Why-Bitcoin-is-So-Volatile-1 2. The magic of supply and demand makes BTC volatile . In case you don't know, Bitcoin was created with a cap supply , limited by an amount determined by its developers, this amount is 21 million tokens, but considering its popularity, its price is greatly influenced by the law of supply and demand. That is, by having a limited amount of tokens and receiving so much demand, its price begins to rise due to the scarcity of tokens . On the contrary, if for some reason big investors start selling their bitcoins and flood the market with them, then their price will start to decline. This volatility driven by supply and demand has its advantages and disadvantages. On the one hand, there is a very good chance that, out of nowhere, its price will drop precipitously, but it will also have an equal chance that its value will skyrocket, so, despite being one of the riskiest investments you can make, many people continue to see it as one of the most interesting market opportunities to invest their money. In any case, for many people this price volatility does not imply a real danger, especially if they already have experience in the area and know how to determine the behavior of cryptocurrencies . 3. It is a technology still in evolution . Bitcoin and cryptocurrency technology are still considered a very young investment platform, since it has barely been launched for a decade , hence not everyone knows their concepts or has confidence in them, this prevents them from being maintained. stable in any situation. Such is the case of influential people in the world who, just by talking wonders or, on the contrary, criticizing these coins, make their price rise through the roof or plummet to the ground respectively. It takes a lot of time, trial and error processes for bitcoin to have a price that resists the onslaught of external factors. 4. World conflicts . This goes hand in hand with the law, with supply and demand and the actions taken by the whales or large investors, since each time the world or global economic outlook is affected by some circumstantial event such as the covid-19 pandemic , crises such as that of containers or wars, sanctions and inflation in powerful countries, make investors alert. So, realizing this, they decide that it is better to move their capital to safer and less volatile investments. Hence they sell their bitcoins, saturate the market and cause its price to decrease. On the contrary, if everything begins to stabilize, they seek to return to these high-risk investments, they buy bitcoin and as demand increases, the value of the currency rises.
Cryptocurrencies

Why is Bitcoin so volatile? 4 fundamental reasons

This scenario typically occurs when recipients seek to “make quick profits, resulting in an immediate sale and, in some cases, a significant decrease in the value of the token,” CoinGecko notes.

Although airdrops or free token deliveries continue to emerge, 19 of the top 50 airdrops posted all-time highs in 2021, amid the cryptocurrency bull market.

4 of these 19 tokens reached their all-time high more than 100 days after the airdrop. These tokens were Uniswap (UNI), 1.145%); 1inch, (1INCH) 216%;, Gitcoin (GTC), 242%; and Bank (BANK), 94%.

In summary, the analysis highlights the importance of considering timing and market conditions when deciding when to sell tokens from an airdrop. Although the 14-day period after the airdrop appears to be key in many cases, each situation is unique, and prudence and personal research remain essential when making financial decisions.

Zeen is a next generation WordPress theme. It’s powerful, beautifully designed and comes with everything you need to engage your visitors and increase conversions.

Zeen Subscribe
A customizable subscription slide-in box to promote your newsletter
[mc4wp_form id="314"]