Thread by @DeFi_educator

Should you sell your (Cosmos)Airdrops 🪂?

You received an airdrop and now you are left with the decision:
- Sell now
- Sell in 1 wk, 1 month, 3 months?
- Hodl for life (long term)?

In this 🧵 I look at the historical data for highest profits 1/19

Wonder how to qualify for airdrops?

Yesterday I made a thread on upcoming & rumoured Cosmos Airdrops 🪂

If you haven't seen it already:

https://twitter.com/DeFi_educator/status/1503494759331028995?s=20&t=Wd6TFw2XO2jVdxwGSrSf9Q

2/19

So let's dive in...
$250 invested in $JUNO in Dec yielded a $NETA airdrop $45k+ worth two months later 💰 💰 💰

But why hodl, when the airdropped token might go to zero? Why not take profits and put it into the tried and tested BTC/ETH or your favourite blue chip? 3/19

Others argue it might be the next UNI/JUNO/DYDX.

It's too easy to look at the chart and say What IF I would have sold here (the pico top)

So what to do? 4/19

As a trader/investor you need to always keep in the back of your mind that Anything Can Happen.

Especially in Crypto.

So the only thing left for you to do in the face of uncertainty is exercise good risk management 5/19

Good risk management means we do an historical analysis on airdrops and take hopium & emotions out of the equation

What if:

We add all big airdrops in the past and compare our portfolio today if we had sold after:
- 1 week
- 2 weeks
- 1 month
- 3 months
- NEVER SELLING 6/19

Luckily an analyst at Messari did the homework for us!

I'll keep this analysis for the purpose of this thread simple and compare:
Scenario 1: selling after 1 week
vs.
Scenario 2: Never Selling

Source:
dune.xyz/messari/Messar… 7/19

Scenario 1 (sold) portfolio value today: $108k
Scenario 2 (hodl) portfolio value today: 29k

Selling after the 1st week gave 3,7x profits compared to hodling

Case closed right?

Not really, it's an unfair comparison for two reasons: 8/19

1) The markets have been down only for 3 months now. So of course the hodler scenario is gonna take the brunt of it. Implicit in this analysis is that you time the markets 9/19

If we had compared the prices at peak euphoria in April '21 before the crash, the hodler outperformed by over 2x

2) In the Cosmos ecosystem, is very community oriented. Airdrop hodlers get rewarded. 10/19

if you sell one airdrop that may disqualify you from getting more airdrops in the future.
E.g. You stake $ATOM and got airdropped $OSMO, $JUNO. 11/19

If you would have sold those, you would have missed out on some awesome airdrops in the future.
$250 worth of $JUNO in Dec yielded a $NETA airdrop $45k+ worth two months later...
So there is some upside that this type of analysis doesn't take into account. 12/19

Okay. So the original analysis is flawed, but what then?

Here’s my process:

- If my high time frame directional bias of crypto is bullish, I’m more inclined to let things ride and take less profits.

- If HTF directional bias is bearish, I take more profits 13/19

- Read whitepaper of the token airdropped

- sell it all if you don’t see the value proposition.

- Ask yourself: Would I invest my money into this if I wasn’t gifted this for free?
(You can’t answer this if you haven’t done your homework) 14/19

- If I do like it, take 20-50% profits, depending on my risk appetite and let the rest ride for a bit

- Then put these profits in my pocket (stablecoin farming) for a rainy day or into ETH/BTC depending on where we are in the cycle.

OR... 15/19

- Put profits into your (new) kepler wallet in form of $ATOM/ $JUNO/ $OSMOS/ $SCRT to continue the process ;) 16/19

- Understand the opportunity cost of having money in a project for a period of time, waiting for it to go up, or for future airdrops, when other things could be outperforming it

Opportunity cost is a big topic and deserves a thread of its own 17/19

@DefiantNews published this article two days ago, that inspired me to write this thread:
thedefiant.io/messari-airdro…

If you don't follow them already, be sure to do so now! 18/19

Wonder how to qualify for those airdrops in the future?

https://twitter.com/DeFi_educator/status/1503494759331028995?s=20&t=Wd6TFw2XO2jVdxwGSrSf9Q

19/19

If this was insightful pls share the insight by retweeting the original tweet 👇

https://twitter.com/defi_educator/status/1503747858079625219