Keyrock Finds Pre-launch Token Trading 20x More Volatile Than Post-launch
2 min read
Keyrock Finds Pre-launch Token Trading 20x More Volatile Than Post-launch
Trading tokens before their official launch is becoming increasingly popular among cryptocurrency investors, despite the fact that it introduces much higher price volatility compared to post-launch trading. A recent report by Keyrock revealed that the pre-launch volatility of certain tokens, such as Wormhole’s (W) token and Jupiter’s (JUP) token, reached up to 3,000% and 2,800% respectively, compared to around 100% and 150% one week after their launch. Keyrock suggests that understanding how market liquidity affects token volatility could help traders make more informed decisions.
The lack of liquidity in pre-launch markets has resulted in the disappearance of the price discovery phase. Price discovery is the period when an asset’s price is determined through the interactions of buyers and sellers. Keyrock emphasizes that without liquidity, there can be no price discovery. Despite this, pre-launch trading continues to rise in popularity, particularly among risk-taking investors who want to be among the first to invest in new crypto projects in the hopes of higher returns.
Many pre-launch buys are driven by the fear of missing out (FOMO) on a specific investment, especially among large investors known as whales. As a result, whales often buy tokens at relatively high prices. Keyrock’s report states that, in the case of the Whales Market, an astonishing 80% of market activity comes from buyers, indicating a strong wave of FOMO. Due to the heightened volatility, most pre-launch markets are not profitable for buyers.
Despite this, over 95% of pre-token investors in tokens like Ethena Labs’ (ENA) token and Pixels’ (PIXEL) token have seen profits. The ENA token has risen by 14% since its launch, while the Pixel coin has experienced a decline of over 31% since its token generation event. Not all token launches have been successful. More than 60% of pre-token investors in Portal’s (PORTAL) token have incurred losses, with the token currently down over 82% since its launch in late February.
The success rate of pre-token investors is inspiring! It goes to show that calculated risks can lead to substantial gains. 📈💰
The rise of pre-launch trading shows how eager investors are to be early adopters and catch the next big thing in crypto.
The disappearance of the price discovery phase in pre-launch markets is a concern. Liquidity matters! 🕵️♀️📉
I can see why some investors are drawn to pre-launch trading. The potential for higher returns is tempting!
The crypto market is a wild ride, especially during pre-launch trading. Strap in and enjoy the adventure!
The crypto market is full of surprises, especially when it comes to pre-token investments. It’s always a roller coaster ride! 🎢💥
Pre-token investments may be risky, but they also provide a thrilling experience for those who love the adrenaline rush.
I’m always amazed by the potential of the crypto market. Pre-launch trading adds a whole new level of excitement and unpredictability!
Liquidity plays such a crucial role in determining token volatility. Understanding this relationship is key!
The potential for massive volatility doesn’t deter investors from exploring pre-launch trading. They have quite the appetite for risk! 🌪️🔥
The crypto market never fails to amaze me. The ups and downs make it a thrilling adventure for investors!
Pre-launch markets may not be profitable for buyers, but they certainly add excitement and opportunities to the crypto space.
With knowledge about market liquidity and its impact on token volatility, traders can navigate the pre-launch market more effectively.