News
Pre-token markets can revolutionize interactions with financial instruments: Keyrock report
Share this article
According to a recent Keyrock, pre-token trading platforms are still an unpredictable market for buyers and sellers relationship. Despite offering early access to tokens before their launch, data collected by Keyrock suggests that few buyers find profits on these platforms.
However, speculation on the token’s price serves as a crucial barometer for initial market reactions and investor sentiment. In cases like JUP and W, the price after the token generation event (TGE) has shown substantial convergence with pre-market prices.
However, not all tokens behave like JUP and W, as some show significant price changes, the report shows. Notably, the whale market often commands a premium over AEVO or Hyperliquid.
Additionally, pre-token markets diverge in trading activity, which can lead to inconsistent price predictions.
“Exchanging a token before its official launch is a pioneering idea. However, if pre-token markets sometimes struggle to agree on the correct price, can they really accurately predict post-TGE prices? This raises crucial questions: Can these markets be trusted and are they truly efficient?”, the report highlights.
To track post-TGE activity, Keyrock created a price index that uses market caps as weights to determine an average. In essence, the pre-TGE index price should converge after the TGE. They analyzed trading activity on AEVO, Hyperliquid and Whales Market for ALT, DYM, ENA, JUP, Pixels, Portal, STRK, TNSR and W.
Analysts at Keyrock explain that the dark blue line displayed in the image above tracks the price of the index post-TGE, serving as a reference point. and should align with the pre-token market index price over time.
Although the AEVO and Hyperliquid indices converge near the TGE, the Whales Market line shows a dramatic spike a few days before the TGE, likely fueled by a palpable wave of “fear of missing out.”
“These observations offer more than just data; provide insights into the emotional and psychological dynamics that drive market behavior prior to the TGE. Understanding these is critical for anyone wanting to navigate the choppy waters of pre-token launches.”
The report therefore finds that the market landscape does not favor a consistent set of winners, as both buyers and sellers can make significant gains depending on the timing.
Another common feature of pre-token markets is the points system, which involves users selling their points used to qualify for airdrops. The report notes a lack of correlation between price movements and these points in the pre-markets.
“Blast and Parcl, for example, exhibit unique trading patterns in their token prices that do not mirror their dot markets. This disconnect highlights a larger problem: the glaring lack of liquidity that hinders genuine price discovery, resulting in volatility that is 10-20 times higher in pre-token markets than seen post-TGE.
Yet despite the flaws identified by Keyrock, they continue to see this as a “development that is simply not compelling to the industry,” with the potential to reshape the broader financial landscape. The ability to trade assets before they actually materialize can revolutionize the way investors interact with financial instruments, the report concludes.
Share this article
The information on or accessed through this website is obtained from independent sources that we believe to be accurate and reliable, but Decentral Media, Inc. makes no representations or warranties as to the timeliness, completeness, or accuracy of any information on or accessed via this website. . Decentral Media, Inc. is not an investment advisor. We do not provide personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become obsolete or may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
Crypto Briefing can enrich articles with AI-generated content created by Crypto Briefing’s proprietary AI platform. We use AI as a tool to provide fast, valuable and actionable insights without losing the insight and oversight of native cryptocurrency experts. All AI-augmented content is carefully reviewed, including for factual accuracy, by our editors and writers and always draws from multiple primary and secondary sources when available to create our stories and articles.
You should never make an investment decision about an ICO, IEO or other investment based on the information on this website and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult with a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analysis or reporting on ICOs, IEOs, cryptocurrency, currency, tokenized sales, securities or commodities.