Are Airdrops the Best Risk-Reward Ratio in Crypto?

Are Airdrops the Best Risk-Reward Ratio in Crypto?

Cryptocurrency is a fascinating niche of investing and trading. Although many projects and companies operate within a multi-billion-dollar profit margin, it still pails compared to traditional, larger markets such as stocks or forex.

Over time, this could easily change. For example, many Millenial and Gen Z investors opt for cryptocurrency trading instead of traditional finance due to some of the enormous returns on display in the space.

Risks In Cryptocurrency

While keeping an eye on the risk and reward factors is a solid idea, there’s no denying that digital currencies are the riskiest asset class. However, the risk with cryptocurrency mirrors the same risks you’d find in having a traditional bank account. So long as you don’t hand out your security details for your cryptocurrency wallet or connect it to a rogue site, your details are virtually impenetrable.

Bitcoin can be used to shop online, send funds internationally without bank fees, play crypto poker, and even book airline tickets. Playing poker with traditional currency or cryptocurrency carries the same level of risk. The games themselves are the same; it’s only the payment method that differs. There are ways to play btc poker, with various levels of risk to reward based on the quality of your hand. Establishing a good poker strategy will enable you to play the game smarter and balance these risks appropriately. So again, it’s all about the game, not the currency.

You also want to ensure you know how to calculate risks with rewards in cryptocurrency trading. Some recent airdrops have swung the balance toward higher rewards, so let’s look at recent examples.

btc poker

What Is a Crypto Airdrop?

With so many projects looking to break into the cryptocurrency mainstream, airdrops are practical marketing tools that benefit investors and developers. Although there are different sets of criteria you must adhere to depending on the airdrop, it is often the best way to obtain coins without having to do very little work or spend much money.

It usually involves using the project as a platform to send your cryptocurrency; the quality or quantity of transactions usually measures it. Depending on how often you perform transactions before the airdrop occurs, you could be in line for many tokens.

Other sets of variables can be more complicated for other airdrops. However, following the steps could put you in line for a payout with minimal risk. For example, the recent Arbitrum airdrop last month proved a resounding success. The average amount of tokens paid out to people who followed a simple set of criteria was estimated to be $400 to $1,200.

These are rough estimates, given the airdrop only took place in March. Still, some traders made thousands of dollars simply by using the layer-2 network to facilitate a handful of their crypto transactions a handful of times a week for a few months. As far as risk and reward go, as far as we know, no other type of investment offers such a high upside for a small amount of risk.

Other Crypto Airdrop Examples

Crypto airdrops have existed for years. Many traders have made money simply by activating the procedures necessary to receive tokens. However, if you’re looking to get involved in future airdrops, they are still a proven method to receive free tokens you can then look to hold long-term or sell when they first hit an exchange.

MetaMask is one of the top choices for people who want to use a cryptocurrency wallet to store their tokens away from an exchange. With rumors circulating that they might be looking to airdrop for a possible token, many traders will be excited at the number of tokens they could receive via an airdrop. Alongside MetaMask, other big potential airdrops in 2023 include:

  • Quai Network
  • Sei Network
  • Starknet
  • zkSync
  • Celestia
  • Vela (DXP)

Other projects are looking to use this successful marketing strategy, too. The best idea is to keep track of the news to see whether there’s confirmed news of an airdrop or a strategy that prominent cryptocurrency experts on social media often post to put yourself with a chance of obtaining free airdrop tokens.

The Bottom Line

We think it’s beyond reasonable doubt that the best way to make money in cryptocurrency while weighing up risk and reward is through an airdrop marketing strategy. Be aware that some projects that can hint at the possibility of an airdrop so that you use their project for your transactions and then fail to launch a token.

It’s a good idea to research whether the project has good fundamentals, a deep level of funding from funding rounds, and a clear pathway to develop the project once it hits an exchange. Suppose a cryptocurrency project can tick all of these boxes. In that case, this can point in the direction that they will use an airdrop to maximize the marketing potential of their initial launch.