Recent data from cryptocurrency data aggregator CoinGecko indicates that holding a airdropped crypto token for more than 14 days has resulted, almost half of the time, in missing the opportunity to sell at its all-time high.
Since 2020, there has been a significant increase in interest around airdrops. The most common way for cryptocurrency traders to receive airdropped tokens for free is by participating in pre-launch blockchain network activities or promotional work. On February 1, Cointelegraph reported that a seventeen-year-old crypto investor claimed to have made over $1 million from the Solana-based JUP airdrop.
According to a recent report by CoinGecko, over the past four years, nearly half (46%) of all crypto token airdrops, including prominent tokens like Ethereum Name Service, Blur, and LooksRare, reached two-week high prices.
“23 of the 50 largest airdrops (46%) recorded peak token prices during the first 2 weeks of their launch date,” the report states.
Other airdropped tokens that peaked in their first two weeks include Manta Network (MANTA), Anchor Protocol (ANC), and Heroes of Mavia (MAVIA).
While some projects reached peak profits in a matter of days, only one airdropped token in the last four years took more than a year to reach its peak price.
Sweat (SWEAT) reached its all-time high 2 days after the airdrop, Wen (WEN) achieved maximum gains of 37% in 3 days, and Optimism (OP) took 1 year and 7 months to reach its all-time high.
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However, significant airdrop sell-offs soon after listing can lead to a sharp price drop, reducing the token's appeal. In many cases, the token fails to recover to all-time highs.
On February 22, Cointelegraph reported that Ethereum's Layer 2 network, Starknet, fell by approximately 60% as Ethereum infrastructure company Nethermind and airdrop farmers dumped millions of dollars worth of the airdropped token.
Additionally, participants in an airdrop may interpret technical issues during the claim process as an unreliable network, leading them to consider selling the token.
In March 2023, the amount of Arbitrum (ARB) tokens moved to exchanges was 150% greater than the inflows to wallets, causing a huge sell-off. This came after users reported issues with the airdrop claim page crashing an hour into the claim process, due to a significant number of requests.
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