Recent research conducted by CoinGecko has shed light on the profitability of participating in crypto airdrops, indicating that timing is crucial for maximizing gains from these events.
The Study Findings
According to CoinGecko’s analysis of the 50 largest crypto airdrops since 2020, a staggering 46% of these tokens reached their peak prices within a mere two weeks of being publicly listed. This revelation underscores the significance of swift action for investors looking to capitalize on airdropped tokens.
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Among the notable examples cited in the report are Ethereum Name Service, Blur, and LooksRare, all of which experienced peak prices within the initial fortnight following their respective airdrops. Additionally, tokens such as Manta Network (MANTA), Anchor Protocol (ANC), and Heroes of Mavia (MAVIA) also saw peak gains within this short timeframe.
Timing Disparities
While some projects saw rapid appreciation in a matter of days, the study highlights a considerable variation in timing. Notably, Optimism (OP) took a prolonged one year and seven months to reach its peak price, contrasting starkly with Sweat (SWEAT), which achieved its all-time high just two days post-airdrop, and Wen (WEN), which peaked within three days.
Challenges Faced
Despite the potential for substantial gains, the report also underscores challenges associated with airdrop participation. Significant sell-offs shortly after listing, exemplified by the recent case of Starknet’s (STRK) token dropping approximately 60%, pose risks to investors. Additionally, technical issues during the claiming process, as experienced with Arbitrum (ARB) in March 2023, can erode confidence and trigger sell-offs.
46% of top airdrops hit ATHs in two weeks. Source: CoinGecko
The findings from CoinGecko’s study provide valuable insights for crypto investors, emphasizing the importance of strategic timing when participating in airdrops. Swift action within the initial weeks post-airdrop could significantly impact potential returns, while vigilance against associated risks is paramount for informed decision-making.
As the popularity of airdrops continues to surge, informed decision-making becomes increasingly critical for investors seeking to maximize gains in the volatile crypto market. CoinGecko’s research underscores the significance of timing in navigating the complexities of airdrop participation, providing a valuable resource for both seasoned and novice investors alike.
