By Nicholas Boey, Coingecko
Compiled by: Felix, PANews
Airdrop activities are becoming more and more popular. Do users sell or hold on to their airdrops? Are the conclusions different in different market environments? Coingecko has compiled the top 50 tokens by airdrop size and analyzed the price performance of each token after the airdrop.
Note: This report analyzes the number of days it takes for an airdrop to reach peak returns from January 1, 2020 to February 20, 2024. Short-term peak returns refer to the highest price returns within the first 14 days after an airdrop.
When is the best time to sell airdrop tokens?
Of the top 50 largest airdrops, 23 (46%) tokens hit all-time highs within two weeks of their airdrop. This suggests that the best time to sell airdropped tokens in order to maximize profits may be within 14 days of receiving them.
Airdrop tokens that reached the highest prices in a short period of time include ENS (2 days after trading started + peak return 73%), X2Y2 (2 days + 121%), Blur (6 days + 90%), LooksRare (10 days + 192%) and ArbDoge AI (14 days + 425%).
Among recent airdrop performances, Jito (+43% on day 2), Wen (+37% on day 3), Dymension (+75% on day 10), Manta (+72% on day 12), and Heroes of Mavia (+217% on day 13) have performed well. Although these recent tokens have only been traded for a few weeks, it remains to be seen whether their prices will rise to new highs, but users will benefit the most if they sell them soon after receiving the airdrop.
Of the 23 airdropped tokens, 16 achieved peak returns between 2-14 days after the airdrop. In other words, once the airdropped tokens were distributed and trading began, user interest in them grew dramatically. This confirms that airdrops are an effective marketing or growth strategy, but it also shows that interest in a particular token tends to grow after an airdrop as more people discuss it, peaking shortly thereafter and reflected in the token's price.
The prices of the remaining seven tokens peaked on the day of the airdrop and were unable to recover. For example, Solana ecosystem aggregator Jupiter's airdrop token (JUP) started trading at around $0.66, but has since fallen 28% and is still below its initial price. This happens when users rush to profit from an airdrop, causing the airdropped tokens to be sold immediately. As more and more users decide to sell, the prices of these tokens face huge selling pressure and go all the way down.
On the other hand, 27 of the 50 airdropped tokens reached their peak gains two weeks after the airdrop, ranging from 15 days to 581 days. Such price peaks in longer time frames usually coincide with favorable market conditions and developments in the respective projects, allowing the price of the airdropped tokens to exceed the initial level.
Market conditions drive returns
38% of airdropped tokens reached a new high during the 2021 bull run
19 out of 50 (38%) airdropped tokens hit new all-time highs during the 2021 crypto bull run. All of these tokens were launched in or before 2021, suggesting that market conditions pushed these tokens to higher prices.
Among these 19 tokens, 4 have reached ATH more than 100 days after their airdrop. These tokens are Uniswap (1145%), 1inch (216%), Gitcoin (242%), and Bank (94%).
Compared to their short-term peaks after listing, these tokens have achieved higher returns from their ATH prices. For example, Uniswap’s “long-term” ATH price return is 1145%, which is more than 10 times (1145%) its short-term peak return (106%).
This suggests that for some airdropped tokens, users may consider holding on to them for the long term to realize appreciation and potentially higher returns under favorable market conditions.
2022: A good year for NFT airdrops, but not for other projects
The crypto market was relatively sluggish in 2022, with only 11 of the 50 airdropped tokens reaching ATH. However, there was a bull run in NFTs at the beginning of 2022, which helped push 3 of the 11 airdropped tokens (ApeCoin, LooksRare, and X2Y2) to new highs. On the other hand, the other tokens that reached ATH in 2022 were launched in the same year and reached ATH shortly after the airdrop. The only exception is Osmosis, which was launched in June 2021 but reached ATH in 2022.
These data suggest that during a bear market, selling immediately after receiving an airdrop is the best time to maximize profits.
2023 and 2024: Bullish sentiment returns?
Bullish sentiment returns as the US approves spot Bitcoin ETF. 21 out of 50 airdropped tokens hit ATH in 2023 and 2024.
Among these 21 airdropped tokens, 8 have reached ATH more than 100 days after being airdropped. These airdropped tokens are Arbitrum (peak gain 68%), Bonk (28,091%), Celestia (777%), Optimism (186%), Aptos (34%), WorldCoin (249%), Arkham (67%), and Maverick (38%).
Another 5 airdropped tokens took 15-100 days to reach their price peak, while the remaining 8 airdropped tokens reached their ATH within 14 days of the airdrop. (Note that 5 of the 8 tokens that peaked within 14 days were recent airdrops: Manta, Jupiter, Dimension, Heroes of Mavia, and Wen).
This suggests that market sentiment will shift in 2024, so holding on to the airdropped tokens could be more profitable when they reach new highs in the expected bull run.
Here are the number of days, weeks, or years it would take for the 50 largest airdropped tokens to reach their all-time high prices as of February 20, 2024, and the corresponding percentage returns from peak prices:
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