CDS Crypto News Crypto News Today- Pre launch Token Trading 20 Times More Volatile Than Post-launch Trading

Crypto News

Crypto News Today- Pre launch Token Trading 20 Times More Volatile Than Post-launch Trading

sevval14/05/20241 Mins read350

Crypto News Today- Pre Launch Token Trading 20 Times More Volatile Than Post-Launch Trading

Pre Launch Token Trading Exhibits 20 Times Higher Volatility Compared to Post-Launch Trading

Crypto News– Pre-launch token trading is a growing trend among cryptocurrency investors, despite introducing up to 20 times the price volatility of post-token launch trading.

Table of Contents

Volatility Trends Before and After Launch

Before their token generation event (TGE), cryptocurrencies like Wormhole’s (W) token experienced over 3,000% volatility, compared to around 100% one week after the coin was launched. Similarly, the Jupiter (JUP) token’s volatility rose to around 2,800% pre-launch, falling to around 150% one week after launch, according to a Keyrock report shared with Cointelegraph.

Impact of Market Liquidity on Volatility

Understanding how market liquidity affects a token’s volatility could help traders take more calculated risks. Due to the lack of liquidity in pre-launch markets, the price discovery phase of pre-TGE tokens has disappeared. In finance, price discovery refers to the period when an asset’s price is organically determined through the buyers and sellers.

Growing Trend Despite Challenges

Despite the challenges posed by the lack of liquidity and high volatility, pre-TGE trading remains a growing trend. More risk-taking investors aim to be the first to gain exposure to new crypto projects in the hope of higher returns.

FAQs

What does “pre-launch token trading” refer to?

Pre-launch token trading refers to the buying and selling of tokens before the official launch or token generation event (TGE) of a cryptocurrency project.

Why is pre-launch token trading significant?

Pre-launch token trading allows investors to potentially gain early exposure to new cryptocurrency projects. However, it also comes with higher levels of risk due to factors such as price volatility and lack of liquidity.

How much more volatile is pre-launch token trading compared to post-launch trading?

According to recent reports, pre-launch token trading exhibits approximately 20 times higher volatility compared to trading after the official token launch.

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sevval

Şevval has been actively writing since 2022 and is a third-year mathematics student at Ankara University. Her interest in writing is shaped particularly around innovative technologies such as Web3, artificial intelligence, and blockchain. She closely follows developments in these fields and aims to convey complex topics to readers in a clear and engaging manner. She enjoys combining her mathematical knowledge with technology to create content and strives to raise awareness about the digital world of the future.