What is Crypto Airdrop and How it works?

Introduction :

The crypto Airdrop is a practice in which the existing crypto currency holders such as Bitcoin receive reward in the form of free token. In simple words, it is a giveaway which aims at promotion of a particular blockchain.  Loyal customers also get rewarded in order to ensure that they continue to subscribe to a particular blockchain platform.

Lets under what is crypto airdrop in detail and how it works.

What is a crypto airdrop?

Transfer of free cryptocurrency from a crypto project into users’ wallets is known as crypto airdrop.

Initiation of an airdrop might have many reasons, However the effect remains the same. The crypto holder receives some amount of crypto tokens or coins, usually for free and sometimes through executing a simple task.

In Few instances, you may also be asked to identify yourself via the Know your customer verification in order to participate in the program.

Crypto airdrops are also offered as a reward for  signing up for a newsletter, following the project’s social media pages, or another way to bring attention to the brand and attract more people to the platform.

What are the pros and cons of crypto airdrops?

Pros :

  • Crypto airdrops help to support your crypto portfolio without directly buying the digital assets.
  • They could also help you in getting on the ground floor of a new platform.

 

Cons:

  • You could spend more time looking for and then claiming airdrop opportunities, only for the price of the airdropped coin to drop before you have a chance to sell.
  • There also underlies the risk of giving money or sensitive information to a fraudulent platform in worst scenarios.

 

Crypto airdrops are worth pursuing suppose you’re a crypto enthusiast who likes to keep up with new developments and actively managing portfolio on a regular basis.

How it Works:

The practice of crypto airdrops is new in the crypto market. Thus creation of concrete rules on the operation is underway. However, it is on the verge of being developed on increasing the project’s  popularity. Some crypto websites started displaying the rules, but with the many others, it is needed to contact developer for additional details.

The developing team announces the date it shall undertake the airdrop. Once the date materializes, the team handling the airdrop takes ‘snapshot’ of the blockchain, resulting in holders of the relevant cryptocurrency receives free e-tokens. Many of the crypto blockchains announce an airdrop beforehand and avoid surprise airdrop to give a boost start to their projects.

Why Airdrop?

The main motto of the crypto airdrop is creating awareness for a new digital currency. Crypto market heavily relies on hype. People are in search of new exciting things and free token serve as an incentive to attract more crowd in to a project. Making an announcement of the airdrop gives a needed buzz to the project on social media and the crypto market.

Valuable database is acquired which is essential for identifying potential customers, Airdrops thus proves helpful in this aspect. Few airdrops require filling of several online forms. However, Clients must always be beware of the scam sites and they should  only give information to official websites. They should never reveal their personal login information to any airdrop organization.

Types of Airdrops

Standard Airdrops: 

Wallet users get small amounts of cryptocurrencies, provided the wallet address or just signing up with the new crypto platform is enough for standard airdrops.

Bounty Airdrops: 

In the bounty Airdrop, the wallet user needs to engage himself in some sort of promotional activity in exchange for the airdrops. This is similar to the barter system. 

Exclusive Airdrops : 

Loyal users of a crypto platform get exclusive airdrops. These airdrops are more like rewards. 

 Holder Airdrops : 

 Just like its name, the holder airdrops are provided to wallet users for holding particular cryptos. They are usually popular ones like Bitcoin or Ether. 

How to get Information on Airdrops

Many websites and the online platforms are created with the aim of providing information about previous, forthcoming and ongoing airdrops. A good example is Icodrops and Airdrop alert, two of these give relevant detail on upcoming airdrop. Tracking various social media platforms of project you’re interested is another way to follow airdrop.

Final words :

Airdrop is being relatively new but vividly used these days in crypto market. Other than regular trading method by investing own money, one can earn huge profit through Airdrops — by providing free coins or tokens to users with public crypto wallets to promote a new virtual currency. The usage of crypto wallet is a marketing tactic which is employed in crypto market to incentivize the use of their platform. 

Crypto.com hacking weighs on Bitcoin

  • The recent confirmation of crypto.com on $30 million stolen by hackers puts pressure on the Bitcoin.
  • Stricter scrutiny on the crypto exchanges also weighs on the crypto- king.
  • Russia call for blanket ban on crypto trading and mining exerts downward pressure on the Bitcoin.

 

Bitcoin had a drop during Friday Asian session. Crypto hacking, Russia’s ban and stricter scrutiny weighs on the Bitcoin.

On Thursday, Cryptocurrency exchange Crypto.com acknowledged that the company had lost well over $30 million in Bitcoin and Ethereum after a hack that took place on January 17th. Elsewhere, The company has been criticized for vague communication around the hack, which was only officially confirmed yesterday by CEO Kris Marszalek.

The new blog post said that the total value of the unauthorized withdrawals was 4,836.26 ETH and 443.93 BTC — equivalent to roughly $15.2 million and $18.6 million respectively, at current exchange rates — as well as $66,200 worth of other currencies. 483 Crypto.com users had their accounts compromised. Crypto.com has said that all affected customers have been fully reimbursed for the losses.

Amidst this hacking issue, came the comment of SEC Chairman regarding stricter scrutiny of crypto exchanges.

The SEC chair said “I’ve asked staff to look at every way to get these platforms inside the investor protection remit. If the trading platforms don’t come into the regulated space, it’d be another year of the public being vulnerable.” Crypto hacking and stricter scrutiny acts as a major catalysts weighing on the Bitcoin.

Elsewhere, The Central Bank of Russia has called for a blanket ban on domestic cryptocurrency trading and mining.

The report titled “Cryptocurrencies: Trends, risks, measures” compares cryptocurrencies to a Ponzi scheme and calls for a complete ban on their use throughout Russia. The authors claim that cryptocurrencies are highly volatile in nature and are being used as a tool for illegal activities. The report also warned that crypto could pose a risk to financial sovereignty and could aid people in taking money out of the national economy.

Meanwhile, The Federal Reserve took a key step in weighing the creation of its own digital currency, a move it said could help ensure the U.S. dollar’s dominance as the central bank grapples with fast-growing private cryptocurrencies and coins issued by other nations.

BTC/USD 4 Hour Chart:

Support: 40592.7 (S1), 39865.6 (S2), 38411.4 (S3).

Resistance: 42774.0 (R1), 44228.1 (R2), 44955.2 (R3).

Amidst all the catalysts weighing on the Bitcoin. We expect a bearish trend for BTC/USD.

Gold edges high despite firmer US yields

  • The soaring inflation in US and Germany favors the yellow metal.
  • US president Biden’s speech supporting the Fed Powell’s helped the Yields to surge.
  • Russia-Ukraine situation also underpins the bullish rally of the Yellow metal.

 

Gold price has edged high and reached the 2 month high of $1844 during Thursday Asian session. The yellow metal holds the uptrend despite the persistent strength seen around the US Treasury yields.

The soaring inflation in the UK and Germany would be favorable for the yellow metal because investors boosted its demand as an inflation hedge. Meanwhile, the recent speech from US President Joe Biden who renewed hopes of faster monetary policy normalization by the Federal Reserve (Fed), also helped the gold prices to soar.

U.S. President Joe Biden on Wednesday said it was appropriate for the Federal Reserve to recalibrate the support it provides to the U.S. economy, in light of fast-rising prices and the strength of recovery.  Biden told a news conference “Given the strength of our economy and recent price increases, it’s appropriate, as … Fed Chairman (Jerome) Powell has indicated, to recalibrate the support that is now necessary.”

“The critical job of making sure that the elevated prices don’t become entrenched rests with the Federal Reserve, which has a dual mandate: full employment and stable prices,” the president said.

Additionally, US President Biden directly warned Russia not to invade Ukraine and if they do they’ll lose access to the US dollar.

Elsewhere, Inflation in Britain had rose faster than expected to its highest in nearly 30 years in December, which has hard impact on living standards and putting pressure on the Bank of England to raise interest rates again.

Russia-Ukraine situation also favors the gold rally as investors look for safe-haven assets to hedge against geopolitical tensions.

Tensions simmer between the West and Russia, with U.S. President Joe Biden predicting Moscow would make a move into neighbouring Ukraine, while Russian officials have denied this. But the Kremlin has massed some 100,000 troops near Ukraine’s borders.

Further, US President Biden had signaled that the talks on the Build Back Better (BBB) stimulus is still on However US Senator Joe Manchin rejects the comments. This US stimulus might weigh on the gold prices.

XAU/USD 4 Hour Chart:

Support: 1819.1 (S1), 1798.1 (S2), 1786.1 (S3).

Resistance: 1852.2 (R1), 1864.3 (R2), 1885.3 (R3).

The inflation figures of UK and Germany, Geopolitical tensions, US Biden’s support for Fed Powell woks as the major catalysts underpinning the uptrend for Gold. We expect a bullish trend for XAU/USD.

UK political angst weighs on pound, CPI eyed

  • Firm US dollar after the previous day’s surge in U.S. yields, weighs on the GBP/USD.
  • The ”Partygate” scandal creates political uncertainty in UK and in turn weighs on the pound.
  • Formal talks between US and UK and the Cautious optimism on the UK inflation data favors the Pound.

 

The Britain Pound seesaws against the US dollar during the Wednesday Asian Session. The Firm US dollar, after the previous day’s surge in U.S. yields and the Political uncertainty in the UK are the major catalysts.

The dollar seems to be boosted by the U.S. Treasury yields which rises further ahead of next week’s Federal Reserve policy meeting at which traders are starting to fear another hawkish surprise.

“A lot of (Fed) officials left us with hawkish impressions right before going quiet (ahead of the meeting),” NatWest markets’ strategist Jan Nevrusi said.

In UK, the focus is on the political uncertainty. The ”Partygate” scandal is the front page news in the UK for some time now and the PM Boris Johnson has denied any wrongdoing. But the public seem to be of different opinion, along with the Conservative party rebels.

The PM Boris Johnson’s presence in the “bring your own booze” garden party while the England was facing first lockdown in May 2020, is throwing his premiership in risk.  Even Some MPs are refusing to accept his claim that he thought it was a “work event”. And this Political uncertainty weighs on the Britain pound.

The FT reported that He will soon face a confidence vote, ”Johnson will attempt to contain the rebellion by announcing a lifting of Covid-19 restrictions in England — a move popular with Tory MPs — but one ally said there was a “50-50 chance.”

UK’s CPI for the December month is due early on Wednesday at 07:00 GMT. With the recently strong employment data, coupled with the cautious optimism at the Bank of England (BOE), today’s inflation numbers will be watched closely by the GBP/USD traders.

BOE Governor Andrew Bailey  is up for a speech after the release of the inflation data and thus adds extra importance to the scheduled economics.

The CPI inflation is expected to a rise of  5.2% YoY versus prior  reading of 5.1% . Talking about the monthly figures, the CPI could ease to 0.5% MoM from 0.7% marked in November.

As per Reuters reports, The US and UK trade teams are expected to announce intent on Wednesday to launch formal talks to resolve trade disputes over steel and aluminium tariffs. This update supports the Pound.

GBP/USD 4 Hour Chart:

Support: 1.3556 (S1), 1.3520 (S2), 1.3468 (S3).

Resistance: 1.3645 (R1), 1.3697 (R2), 1.3733 (R3).

UK’s political uncertainty along with cautious optimism at the Bank of England (BOE), today’s inflation numbers and the Firmer US dollar are the major catalysts underpinning the GBP/USD move. We expect a mix trend for GBP/USD.