Emerging crypto trend: Pre-release token trading

A burgeoning trend is gaining momentum in the cryptocurrency sphere, with investors increasingly opting to buy tokens prior to their official market release. In this rapidly evolving landscape, early investment holds paramount importance, offering the potential for substantial gains as pioneering projects garner momentum and acceptance. Consequently, investors are exploring avenues to initiate purchases even before the starting gun is fired, signaling the commencement of the race.

Pre-Token and point markets witness increased buyer dominance

As per the Keyrock report, the markets demonstrated a clear preference for buyers, with the majority of tokens analyzed indicating a greater volume of buying activity compared to selling.

This trend implies that investors were more inclined towards acquiring tokens rather than selling them, driven by the belief in potential appreciation post-Token Generation Event (TGE).

The report noted:

"Most tokens exhibit a notably higher buying volume than selling volume. Only 5 out of 57 tokens traded on Whales Market show a selling volume surpassing the buying volume. Participants in Whale Markets exhibit a strong inclination towards purchasing tokens, points, and runes."

Pre-token and point markets gain momentum

Recently, investors gained the ability to purchase cryptocurrencies before their official launch through Initial Coin Offerings (ICOs), a fundraising mechanism utilized by new decentralized finance (DeFi) ventures. This allowed speculation or hedging against token prices pre-launch, ushering in a new era of crypto investing. In essence, pre-token and point markets enable buying or selling commitments for tokens or points before their official release, with trades settled either in cash or actual tokens/points. This setup permits investors to speculate on future token or point values, potentially profiting from price changes pre-release. According to Anndy Lian, an inter-governmental blockchain advisor, participating in pre-sales not only supports project development but fosters community alignment with project goals, driving demand. A recent Keyrock report highlighted a significant surge in interest and participation in these markets, with $50 million already traded, indicating growing investor enthusiasm to engage with new crypto projects early on. Predominantly catering to buyers, these markets attract users eager to purchase tokens or points before public release, driven by the potential for substantial returns post-launch.

Low liquidity persists

Despite positive trading volumes, pre-token and point markets encounter liquidity challenges. The Keyrock report notes their comparative illiquidity compared to traditional post-TGE markets, resulting in fewer participants and potential price volatility. Moreover, pre-release token demand sometimes hinges more on hype than project fundamentals, leading to inflated valuations. An emphasis on transparency, communication, and community trust enhances project success in pre-release trading, as investors prefer projects they trust. Additionally, technical issues pose significant risks in purchasing cryptocurrencies before full launch, given the nascent stage of the underlying technology.