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AIRDROPS: THE UPS AND DOWNS OF FREE COINS

Updated: Apr 8, 2018

Who doesn't like free, right? Don't get me wrong. Airdrops can be great, but they can also cost you money. Let's start by going here and reading what an airdrop is.


While an airdrop can be profitable, you need to be careful. The chart below shows an example of what can happen immediately following a snapshot of a wallet (or as this he case below following an announcement of anticipated news which never came. Notice the big red candle? You can lose a lot if you are caught in this position and don't have a stop loss set up.


Example: I invest $1000 into NEO, with the anticipation that they have an upcoming airdrop and I will receive 10 GAS tokens for every 1 NEO I own. Sounds great, right? Everyone has the same idea as I do. Buy as much NEO as you can in order to receive the free GAS tokens. You may notice a run up in the price prior to the airdrop, which can be great. But what happens the moment they take a snapshot of the wallets? People may sell the original coins and hold the free ones, which may cause a drop in the price. Your original investment of $1000 may drop by 10-30% or more. I'm not saying this happens with every airdrop, but it's something you need to be aware of. If you believe in the original coin, by all means, hold onto it. In the long run, most coins regain their value.


ALWAYS verify an airdrop directly via the company. Feel free to email them. If they are reputable, they should not have a problem responding to you quickly. Never rely on a third party post or Tweet to jump into an airdrop. I've seen people lose all of their money this way.



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