A crypto airdrop is the free distribution of tokens and crypto assets. A small group of recipients can then consider themselves lucky and receive a crypto asset for free during an airdrop
Similar to a giveaway, real Crypto Airdrops are therefore free of charge and do not involve any disadvantages for the recipients. However, the recipients must have a suitable wallet in order to be able to receive and store the free crypto sample at all.
What types of Crypto Airdrops are there?
- Crypto Airdrops as a promotional gift
- Rewards for new wallet customers
- Rewards for holding a cryptocurrency
- Airdrop after completing marketing tasks
Are Airdrop cryptos really always absolutely free?
- Most crypto airdrop actions are indeed free of charge.
- However, sometimes there are costs involved. Especially if there is the task of opening a new wallet.
- Then there are the supposed Airdrops quasi as a new customer premium, but only after a first deposit
How do Crypto Airdrops work?
Crypto AirdropsSometimes Crypto Airdrops are also distributed directly by the crypto wallet providers. Then, in the majority of cases, it is a bonus that is given out either to new customers or to long-time loyal users.
Again and again, the receipt of cryptocurrencies via Airdrop is also linked to small conditions. For example, sometimes the free coins are only given after a small task has been completed.
For example, every now and then it is required that you post something on social media about the cryptocurrency. Or, for example, the Airdrop cryptos are only available to people who sign up for the Telegram channel of a new crypto project.
Why are crypto airdrops performed?
The idea behind most crypto airdrops is usually that the developers want to draw attention to a new crypto project via the action. That is why the vast majority of airdrops are limited to cryptos that are still relatively new.
However, the distribution of tokens via a Crypto Airdrop is sometimes also pushed by well-known wallet providers and crypto exchanges. This is because long-time customers can also be rewarded for their loyalty via crypto airdrops.
A special form is represented by regular bonuses, which are sometimes offered over a longer period of time. The reason for such Crypto Airdrops is usually to extend the holding period.
So, in order to positively influence the market capitalization, airdrops can also be used. Because since the price of crypto assets is formed via the balance between supply and demand, a longer holding period can push a new crypto project upwards.
So, if token holders don’t always sell everything again right away, but instead tighten the supply by holding it for a longer period of time, price increases can occur. Some Airdrop Crypto promotions are therefore structured in such a way that the owners repeatedly receive small token holdings as a loyalty bonus, and are therefore more willing to leave the crypto asset in the wallet as a hold position for the long term.
How do I get airdrops?
The procedure is sometimes a bit complicated. Normally, the Airdrop Coins are only credited after certain requirements have been met. In addition to the task of promoting the coin, there is often also the requirement that you have to open a new wallet.
Really free or only after a deposit? Sometimes the airdrops are also tied to deposit requirements. In this case, you only get the coins after opening a new wallet and making your first deposit of fiat money. The provider Blockfi, for example, gives new customers a Bitcoin airdrop worth USD 10 after the first deposit of USD 100.
Unknown wallets or big crypto brokers? In our opinion, it is better not to sign up with unknown Airdrop wallets on the Internet. It is much safer to use regulated and well-known crypto brokers, such as eToro.
Are there any automatic crypto airdrop finders? Most crypto airdrop bots are really reputable. We have not come across a really good Airdrop Finder yet either. So, if you want to get the free coins regularly, you have to do the work yourself. Compared to normal trading, searching for airdrops is probably less lucrative for most people.
How do I use airdrops?
For each airdrop, the procedure to get them is slightly different. However, once you have the crypto asset on the wallet, you can use it just like other cryptos. So, it is either possible to sell the crypto asset or save it.
With cryptocurrencies that are still unknown, a little patience can be worthwhile. Because should the price rise, the free receipt of a cryptocurrency could later become much more lucrative.
Therefore, we recommend holding the new coins for a long time with the hope that a big jump in the price will set in one day.
How do I find the best airdrops?
On the Internet, there are a number of crypto airdrop lists where new projects are presented. Since in Germany the topic still generates a bit less interest than in the US, there is not yet a really good platform for Crypto Airdrops in German.
The developers of new tokens often post information on the Internet via social media. On Twitter and Crypto Airdrop Reddit forums, for example, the promotions are advertised. If you want to keep an eye out for future Crypto Airdrops 2022, you should also keep an eye on the latest projects on the crypto launchpads.
For some well-known platforms, such as Binance, there are always airdrops for existing customers as well. Thus, sometimes new deposits or holding certain assets are also rewarded with bonuses. If you already have a crypto broker, you can also ask the customer service of your broker about free coins.
Is there also a risk with Airdrops?
Risk – IconReceiving free tokens does not involve any risk in and of itself. After all, the small crypto gifts are free of charge. Even if the value of the coins should fall, you have not lost any of your own money. In addition, the cryptos distributed via an airdrop can also be sold. Nobody has to keep the crypto airdrops in their wallet for a long time afterwards.
However, it is important to note that not all cryptocurrencies that rely on airdrops as a marketing tool will be successful in the long run. Some cryptocurrencies hyped up via giveaways must therefore also be viewed critically. This is because the method can come to distort the market in the short term.
If we look at the specific risks, two scenarios in particular stand out for consideration. The first would be the scenario of a “pump-and-dump scheme,” where a price is pushed up in the short term by media-pushed demand.
While early investors can sometimes even make big profits in such developments by bailing out in time, there is always the risk of missing the best time to sell. However, those who only wake up after the crash and then try to get rid of the tokens will then often suffer losses.
The other risk is that there are sometimes also dubious crypto assets that serve solely to raise capital for the issuers. These then try, for example, to first achieve a certain level of awareness via airdrops.
After that, an ICO (Intitial Coin Offering) is often used to raise money for a start-up or a supposed business idea. However, as soon as enough tokens have been sold, the project is abandoned without a sound, which can then sometimes almost amount to a bruising of investors or even fraud.
How are Airdrops taxed?
The topic of crypto airdrop tax has already led to heated discussions. This is because the tax authorities are eyeing the cryptocurrency scene with a wary eye, and some experts feared tax implications, especially for regular airdrops.
However, since these are promotional gifts (and not interest or dividends), the receipt of airdrops is tax-free. In fact, most tax advisors we know classify Free Crypto Airdrops as random winnings.
Accordingly, similar to a small lottery win, no tax obligations would be due. Because you can think of Airdrop Cryptos as a chance find of a coin on the street, we also think this is the right way to look at it.
In case of doubt, however, it is always advisable to contact your own tax advisor. The legal situation regarding the taxation of crypto assets is changing and the finance ministers are trying to get a bigger and bigger piece of the pie.
What looks like a great thing at first glance is not always beneficial. Often, the real value of the airdrops is also relatively small. Therefore, the profit potential is controversial. Moreover, not all airdrop cryptos are successful in the long run.
While no one would turn down free giveaways, we think the strategy of looking for Crypto Airdrops is wrong. This is because investors’ time is better invested on modern trading platforms like eToro. Via leveraged trading, for instance, more profit can often be made in just a few minutes than can be found via Crypto Airdrops.
Frequently asked questions about crypto Airdrop
How does a crypto airdrop work?
Users receive a small amount of free crypto assets distributed to their wallet as a promotional gift. The receipt is free of charge. After that, the tokens can be sold according to the terms of the wallet or stored for the long term.
How to get crypto airdrops?
In the world of cryptocurrencies, there are several ecosystems and blockchain technologies. Not all wallets are compatible with the new coins and tokens. So, to get the crypto credit, you need a wallet that is compatible with the particular crypto airdrop ecosystem.
What types of airdrops are there anyway?
First, there are airdrops of brand new coins that have just hit the market. Second, sometimes you can be rewarded as a customer by established crypto brokers via airdrops. Thirdly, there are some crypto projects that automatically issue cryptos to all investors at staggered intervals. Namely, via the slow and regular distribution of Airdrop Cryptos, developers often try to extend the average holding period.
What is the difference between airdrops, IEO, IDO and ICO?
Simply put, airdrops are giveaways that draw attention to a new token. However, the distribution of the first airdrops is often followed by an IEO or an IDO. In technical jargon, this refers to the first official sale of the tokens. While IEO (Initial Exchange Offering) is the first offering on a crypto exchange, in an IDO the new token is offered only on decentralized marketplaces. The decentralized marketplaces are also called DEX. It is important to understand that in both variants, the crypto assets are not purchased directly from the issuer, but are traded between investors on the respective marketplaces. So, unlike the ICO, the Initial Coin Offering, in an IEO or IDO you do not buy the crypto asset from the original developer, but on a marketplace. However, unlike regular crypto exchanges, the prices on decentralized crypto exchanges are not necessarily interconnected. So, there may be (slightly) different price developments on the different marketplaces.
Airdrops vs ICO – what do I need to know?
Airdrops are usually free rewards distributed to a small group of recipients. Sometimes they are meant to draw attention to an initial sale of a new crypto asset. This initial sale is then usually called an ICO. The acronym ICO stands for Initial Coin Offering, which is the first-time sale of coins directly from the developer. Sometimes ICOs are also linked to other projects or even charitable goals. But often they simply represent a way to raise capital via crowdfunding. A number of ICOs, for example, have been launched by startups that can raise money for their projects through ICOs.
What is an airdrop coin?
This is the name given to crypto assets that are distributed free of charge according to the watering can principle.