Jupiter (JUP) has become a hot topic in the market due to its large community, but many CEX investors and newcomers did not pay attention to the upcoming massive token airdrop release. As time goes on, more and more signs indicate that this event will not only fail to push JUP prices up, but may instead trigger serious market selling pressure and price crashes. For participants, this may be a crisis that requires extreme caution rather than an opportunity.
Core risks of airdrop releases
1. Massive release, severe supply-demand imbalance
Current circulation: 1.3 billion (of which 400 million are staked on-chain)
Airdrop: 1 billion (700 million planned airdrop + 300 million ASR rewards)
Among them, ASR rewards annualized: 90%
So this coin CEX traders cannot compete with the old hands of DEX
The total amount of Jupiter's airdrop is huge, and most of these tokens are distributed to early participants, the project team, and speculators. These individuals often aim for "arbitrage" as their primary goal, and their strategy is very simple: sell immediately after the tokens are unlocked to lock in profits.
Once a massive amount of tokens flows into the market simultaneously, the market will quickly fall into a situation of oversupply, and buy orders will simply be unable to absorb such large selling pressure, leading to a price collapse. This phenomenon is common in the crypto market, with many projects experiencing price drops of 70%-90% during the release period.
2. The cost for airdrop participants is extremely low, and the motivation to sell is strong
Most airdrop recipients have a token cost close to zero, and this "no-cost arbitrage" is the main reason for the crash during the airdrop release period.
Some recipients have no motivation to hold long-term; they only care about quick cashing out.
Everyone hopes to sell before others to avoid further price declines, which can create a cascading effect and exacerbate the speed and extent of the price crash.
3. JUP market confidence is gradually weakening.
Before the massive airdrop release, the price of JUP had already shown signs of weakening. Many speculators have already entered the market, trying to drive up the price for profit before the airdrop, and once the airdropped tokens are unlocked, these speculators will also start selling, creating a "double selling pressure."
What's even scarier is that there are very few real long-term value investors in the market, and the incoming funds for buying are obviously insufficient, which makes it difficult for JUP's price to stabilize.
The painful lessons of past airdrop projects
Price crash after Aptos (APT) airdrop
Aptos faced a large sell-off pressure from users after the airdrop release, with prices plummeting over 50% in just a few days. Many early users who received the airdrop cashed out directly, leading to a rapid collapse of market confidence. Although there was a rebound later, the short-term crash resulted in significant losses for countless buyers.
Optimism (OP) airdrop crash
Optimism was once a highly regarded Layer 2 project in the market, but after the massive airdrop release, the price of OP tokens plummeted from $1.7 to $0.5, a drop of over 70%. Users participating in the airdrop almost all chose to sell, severely impacting the project's long-term development.
Key risks that market participants should be vigilant about
1. The risk of buying at high positions is extremely high
Before the airdrop release, many institutions and individual investors may artificially drive up prices to create an "upward illusion" to attract retail investors to chase highs. However, once the airdrop is unlocked, all chips will be dumped on retail investors who chased the highs, leading to severe losses.
2. Short-term crashes are hard to avoid
Even if you believe Jupiter has long-term potential, the price crash caused by airdrop releases in the short term is almost inevitable. You may buy seemingly "low-price" tokens, but before the selling pressure dissipates, prices are likely to fall further, putting you in the dilemma of "catching the bottom halfway up the hill."
3. The possibility of liquidity collapse
Airdrop releases often come with a surge in trading volume, but as selling pressure increases, market liquidity will quickly dry up. When there aren’t enough buy orders, prices will fall at a faster pace, making it difficult for you to close your position and exit.
How to cope with the airdrop release period?
1. Avoid blindly chasing highs
Price fluctuations before and after the airdrop release period are huge, and many early investors have already positioned themselves, making retail investors who chase highs easily become "leeks." It is better to miss out than to take the risk of buying in.
2. Closely monitor the release ratio and schedule
Understand the release rules of JUP airdrops; if the release ratio is high and the concentration is large, then market selling pressure may be even more severe. Be cautious with your holdings before the unlocking period ends.
3. ASR stakers should use leveraged trading for hedging (shorting with low leverage)
During the airdrop release period, the market is highly susceptible to crashes, but with 450 million JUP staked and difficult to release, it is necessary to hedge in time to lock in profits.
Approach airdrops rationally and don’t be a bag holder!
The release of Jupiter's airdrop may be a means for the project team to attract users, but for ordinary investors, it often means bloody sell-offs and price crashes. The significant drops during the airdrop release period have become a "routine" in the crypto market, and all participants should remain vigilant to avoid becoming victims of the speculative wave.
Remember: there are no free lunches in the crypto market, the so-called "airdrop feast" may just be a carefully crafted harvesting scheme. Stay away from the risk of a crash and protect your funds!