CoinGecko’s study of airdropped tokens reveals that selling early is critical to maximizing profit, with 23 of the 50 largest airdrops seeing significant gains.
Token launches, often seen as a windfall for cryptocurrency enthusiasts, come with the strategic dilemma of what is the best time to sell for maximum profits. CoinGecko, a cryptocurrency data aggregator, recently published an insightful study that can serve as an important guide for airdrop recipients.
When to Earn from Airdrops?
According to CoinGecko’s analysis, almost half of the major airdrops recorded peak token prices within two weeks of their distribution date. Specifically, 23 of the top 50 airdrops saw their value skyrocket shortly after launch, suggesting that selling early may be the key to maximizing profit.
Notable examples include Ethereum Name Service (ENS) and X2Y2, which showed impressive gains of 73% and 121% respectively in just the second day of trading. On the other hand, airdrops like Blur, LooksRare and ArbDoge AI have also shown significant returns in the short term.
Annual market conditions: Decisive factor
CoinGecko’s analysis further broke down airdrop performance under various market conditions, providing a nuanced view of the crypto-landscape.
The 2021 Bull Market
During the 2021 boom, 38% of airdrop tokens reached their all-time highs (ATH), highlighting the impact of general market trends on token valuations. For example, Uniswap’s ATH price return of 1.145% was a staggering tenfold increase over its highest return in the first two weeks of trading.
2022 Bear Market
Conversely, in a bearish climate in 2022, the study indicated that immediate selling after the airdrop is generally more profitable, especially for non-NFT tokens. This change reflects the volatility of the market and the need for airdrop recipients to remain attuned to the broader economic environment.
The return of bullish sentiment in 2023 and 2024
The analysis pointed to a resurgence of bullish sentiment in the coming years, with the approval of a spot bitcoin ETF in the US adding to that optimism. Tokens like Arbitrum (ARB) and Bonk (BONK) have shown that holding onto airdrops for an extended period can lead to significant gains.
Airdrop Profit Dynamics
CoinGecko’s study covers four years of data and shows the different results of airdrop earnings. While some tokens peak immediately, others accumulate value over time, often depending on project development stages and market conditions.
Airdrop Earnings at Peak Prices: A Closer Look
Here are some notable airdrop tokens and their percentage return to peak price:
- Bonk: 28,092% after 51 weeks
- Arbitrum: 68% after 43 weeks
- Uniswap (UNI): 1145% after 33 weeks
- Optimism (OP): 186% after 1.6 years
Methodological rigor
CoinGecko’s methodology involved collecting 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 tokens, strategic sales are vital. While quick profits are tempting, data shows that market conditions, project growth, sentiment and patience can be more profitable in the long run.
Final thoughts
Insights from CoinGecko’s meticulous research offer valuable guidance for navigating the complicated moment of airdrop token sales. For the evolving cryptocurrency market, adaptive learning and strategic planning remain critical for investors seeking to maximize their returns.
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