Token drops, often seen as a windfall for cryptocurrency enthusiasts, present a strategic dilemma about when best to sell for maximum profits. CoinGecko, a cryptocurrency data aggregator, recently published an insightful study that can serve as an critical guide for airdrop recipients.
When to make money on Airdrops?
According to CoinGecko analysis, almost half of the major airdrops saw token prices peak within two weeks of their distribution date. In particular, 23 of the top 50 drops saw their value skyrocket shortly after launch, suggesting that selling early may be the key to maximizing profits.
Notable examples include Ether Name Service (ENS) and X2Y2, which already on the second day of trading showed impressive gains of 73% and 121%, respectively. On the other hand, airdrops such as Blur, LookRare, and ArbDoge AI have also shown significant profitability in the brief term.
Annual market conditions: the determining factor
CoinGecko’s analysis further broke down airdrop performance across different market conditions, providing a nuanced view of the crypto landscape.
Bull market in 2021
During the 2021 bull market, 38% of airdrop tokens reached their all-time highs (ATH), highlighting the impact of overall market trends on token valuations. For example, Uniswap’s ATH price return of 1,145% was a staggering tenfold enhance over the highest returns in the first two weeks of trading.
Bear Market in 2022
On the other hand, in the bearish climate of 2022, the study found that immediate post-drop sales were generally more favorable, especially for non-NFT tokens. This change demonstrates market volatility and the need for discharge recipients to adapt to the broader economic environment.
Bullish sentiment returns in 2023 and 2024
The analysis indicated a return to bullish sentiment in the following years, and the approval of spot Bitcoin ETFs in the US contributed to this optimism. Tokens like Arbitrum (ARB) and Bonk (BONK) have shown that holding on to airdrops for long periods of time can lead to significant profits.
The dynamics of profits from airdrops
CoinGecko’s study covers four years of data and shows a variety of airdrop profit results. While some tokens peak immediately, others enhance in value over time, often adapting to project development milestones and market conditions.
Airdrop Profits at Highest Prices: A Closer Look
Here are some notable airdrop tokens and their peak price return percentages:
- Bonk: 28.092% after 51 weeks
- Rate: 68% after 43 weeks
- Uniswap (UNI): 1,145% after 33 weeks
- Optimism (OP): 186% after 1.6 years
Methodological rigor
CoinGecko’s methodology collected price data from January 1, 2020 to February 20, 2024, providing a comprehensive understanding of airdrop performance.
Strategic implications for investors
For those who hold airdropped tokens, a strategic sale is indispensable. While quick profits are tempting, the data suggests that market conditions, project development, sentiment and patience may be more profitable in the long run.
Final thoughts
The insights from CoinGecko’s careful research offer valuable guidance on navigating the elaborate airdrop token sales timeline. In the evolving cryptocurrency market, adaptive learning and strategic planning remain crucial for investors looking to maximize their returns.
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