CoinGecko's report highlights that holding a newly airdropped crypto token for over 14 days often results in missing the opportunity to sell at its peak. Explore the trends and risks of crypto airdrops.
Recent statistics provided by CoinGecko's cryptocurrency data aggregator reveal that holding a recently airdropped crypto token for more than 14 days often results in missing out on the chance to sell at its peak value.
Since 2020, there has been a notable surge in interest surrounding airdrops. The most common method of acquiring free airdropped tokens involves engaging in pre-launch activities or promotional efforts within blockchain networks.
On February 1, Cointelegraph reported a story where a 17-year-old crypto investor claimed to have earned over $1 million from the Solana-based Jupiter (JUP) airdrop.
As per CoinGecko's recent report, over the past four years, approximately 46% of the top 50 crypto token airdrops, including well-known tokens like Ethereum Name Service, Blur, and LooksRare, reached their peak prices within the initial two weeks of their launch.
The report emphasizes that "23 out of the 50 biggest airdrops (46%) recorded peak token prices during the first 2 weeks of their airdrop date."
Other airdropped tokens, such as Manta Network (MANTA), Anchor Protocol (ANC), and Heroes of Mavia (MAVIA), also experienced their peak values within the first two weeks.
While some projects achieved their maximum gains within days, only one airdropped token among the top 50 in the past four years took more than a year to reach its highest price.
Optimism (OP) took one year and seven months to reach its peak. In contrast, Sweat (SWEAT) reached its all-time high just two days after the airdrop, and Wen (WEN) saw peak gains within three days.
Nevertheless, substantial sell-offs of airdrops shortly after listing can lead to a significant drop in price, diminishing the token's allure.
On February 22, Cointelegraph reported a case where the token of Ethereum layer-2 network Starknet (STRK) plummeted by approximately 60%. This decline occurred as Ethereum infrastructure firm Nethermind and airdrop participants unloaded millions of dollars worth of the distributed tokens.
Moreover, technical issues during the claiming process may be perceived by airdrop participants as a sign of an unreliable network, prompting them to consider selling the token.
In March 2023, the volume of Arbitrum (ARB) tokens moved to exchanges exceeded inflows to wallets by 150%, resulting in a significant sell-off. This followed reports of problems with the airdrop claim page crashing within an hour of the claiming process commencement due to a high volume of requests.