In the expectation of a bull market for 2024 following the Bitcoin (BTC) halving, token airdrops are becoming popular again.
Although rewarding for its participants, investors should avoid trading recently airdropped cryptocurrencies. This is because these tokens could experience massive sell-offs in the short term, with early receivers realizing their prize.
Interestingly, the larger the number of tokens airdropped, the more likely this token will trend with these holders trying to promote the asset to get enough liquidity for realization. In this context, Finbold picked three cryptocurrencies trending due to recent massive airdrops that investors should avoid trading next week.
Picks for you
Avoid trading Dymension (DYM) IOU token
First, Dymension’s (DYM) airdrop attracted speculators and is currently trending due to its mainnet launch on February 6. Therefore, the DYM distribution airdropped an IOU token – not the real native asset that will launch within the mainnet.
More than the usual risks of trading a recently distributed cryptocurrency, Dymension also exposes traders to liquidity risks as people will redeem the IOU synthetic asset for the real token.
DYM’s IOU is trading at $4.69, keeping a relatively stable history since January 29. Thus, increasing the risks of a dump after the mainnet’s launch.
Jupiter (JUP)
Jupiter (JUP) is another trending cryptocurrency that was recently airdropped, and investors should avoid trading it next week.
Notably, JUP has already experienced a massive drop of 50% from its initial value on January 31, from $1.27 to $0.63. This evidences what can happen with an airdropped token in its first stages. Still, Jupiter has only distributed 13.5% of its total supply, meaning more sell-offs are expected moving forward.
Avoid trading ZetaChain (ZETA)
Finally, ZetaChain (ZETA) is the third cryptocurrency to avoid trading following its airdrop. ZETA is trading in an uptrend from $0.817 to $1.78 at the time of publication. ZetaChain already has a market cap of $420 million, which is relatively high for a new project.
In this aspect, ZETA is the most likely asset to experience a huge dump if the airdrop receivers decide to realize this gigantic profit.
It is worth mentioning that highly promoted airdrops also become attractive targets for hackers. For that reason, people participating in these events must be extremely careful when clicking on links and connecting their wallets. Despite the risks, experienced traders can find great opportunities with airdrops or even trading these newly launched cryptocurrencies.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
