When is the best time to sell airdrop tokens?

1. When is the best time to sell airdrops?

Of the 50 largest airdrops, 23 (46%) recorded a peak token price within two weeks of the airdrop date. This suggests that the best time to sell airdrop tokens may be within 14 days of receiving them to maximize profits.

Airdropped tokens that achieved the highest price returns in a short period of time include Ethereum Name Service (+73% on day 2 of trading), X2Y2 (+121% on day 2), Blur (+90% on day 6), LooksRare (+192% on day 10), and ArbDoge AI (425% on day 14).

Of the recent airdrops, Jito (43% increase on day 2), Wen (37% increase on day 3), Dymension (75% increase on day 10), Manta (72% increase on day 12), and Heroes of Mavia (217% increase on day 13) were also the most profitable for investors who received the airdrops if sold soon after the airdrop. Still, these airdrops have only been traded for a few weeks, and it remains to be seen whether the prices of their tokens will rise to new highs.

Of the 23 airdropped tokens, 16 of them achieved peak gains between days 2 and 14 after the airdrop date. In other words, once a token is airdropped and begins trading, interest tends to rise dramatically. This confirms that token airdrops are an effective marketing or growth strategy, but it also shows that as more people talk about the airdrop, interest in a particular token tends to grow, peak shortly thereafter, and be reflected in the token’s price.

The remaining seven airdrops peaked in price on the day of the airdrop, and the token price was unable to recover. For example, Solana aggregator Jupiter's airdrop token began trading at around $0.66, but has since fallen 28% and remains below its initial price. This happens when airdrop recipients rush to take profits from their "free money," resulting in an immediate sell-off of the airdrop. As recipients decide to exit the airdrop over time, the token prices of these airdrops continue to face selling pressure and hit new lows.

On the other hand, 27 of the top 50 largest airdrops reached their peak gains more than two weeks after the airdrop date, ranging from 15 to 581 days. Price peaks over such longer time frames usually coincide with favorable market conditions and growth of the respective projects, which have led to valuations of airdropped tokens beyond initial levels.

2. Market conditions drive airdrop price returns

38% of airdropped tokens peaked during the 2021 bull run

Amid the crypto bull run, 19 of the 50 largest airdrops hit new all-time highs (ATHs) in 2021. All of these were launched before or in 2021, suggesting that market conditions drove higher valuations for these airdropped tokens.

4 of these 19 tokens have reached ATH more than 100 days after their airdrop. These airdropped tokens are Uniswap (1.145%), 1inch (216%), Gitcoin (242%), and Bank (94%).

The ATH prices of these tokens have seen significantly higher returns compared to short-term peaks. For example, Uniswap’s ATH price return was 1.145%, which is 10 times higher than the highest price return of 106% in the 14 days before trading.

This suggests that for some airdrops, recipients may consider retaining their airdrop allocation to increase in value over a longer period of time in order to achieve higher profits under favorable market conditions.

2022: A good year for NFT airdrops, but not for others

In 2022, the market conditions were relatively pessimistic, with 11 of the 50 airdropped tokens reaching ATH.

However, in early 2022, there was a bull run in non-fungible tokens (NFTs), which helped push the valuations of 3 of these 11 airdropped tokens (ApeCoin, LooksRare, and X2Y2) to new ATHs. On the other hand, the other airdropped tokens that reached ATHs in 2022 were launched in the same year and reached ATHs shortly after the airdrop date. An exception is Osmosis, which was launched in June 2021 but reached ATHs in 2022.

This suggests that during a bear market, right after an airdrop is the best time to sell the airdropped tokens to maximize profits.

2023 and 2024: Bullish sentiment returns?

The remaining 21 of the 50 airdropped tokens reached ATHs in 2023 and 2024, with bullish sentiment returning due to the approval of a US spot Bitcoin ETF.

8 of these 21 airdropped tokens have reached ATH more than 100 days after the airdrop. These airdropped tokens are Arbitrum (68%), Bonk (28,091%), Celestia (777%), Optimism (186%), Aptos (34%), WorldCoin (249%), Arkham (67%), and Maverick (38%).

Another 5 airdrops took between 15 and 100 days to reach their token price peak, while the remaining 8 airdropped tokens reached their ATH within 14 days of the airdrop date. (Note that 5 of the 8 tokens that peaked within 14 days were recent airdrops: Manta, Jupiter, Dymension, Heroes of Mavia, and Wen).

This suggests that market sentiment will shift in 2024, so it may be more profitable to hold the airdropped tokens when they reach new valuations in the expected bull run.

3. When to sell the airdrop

Number of days, weeks, or years required for the 50 largest airdrops to reach all-time high token prices as of February 20, 2024, and the corresponding percentage returns from peak prices: