What is pre-market? Investors can take advantage of early-stage chances by buying and selling new tokens in the pre-market at predicted prices and quantities before they are officially listed.
What is pre-market?
Tokens are traded in the market with verifiable listing information before they are formally distributed and launched. Through this system, early adopters of a token have the opportunity to wager on its future price appreciation and perhaps profit from it.
You can trade points (Point) that could be utilized for future airdrops during the market, and it’s not limited to just certain token types either. In trading, sellers specify the quantity and price they want to sell for by placing sell orders, which are similar to conventional limit orders.
Not only does the market provide traders with valuable information, but it also gives users crucial details on tokens like TGE, pre-sale, and more. By analyzing demand and data from early token trading platforms, market analysis helps assess the potential of assets.
Classifications of pre-market trades
Outside of market hours (OTC)
before purchasing For tokens that have not been formally issued, there is an over-the-counter market for trading. Market participants can take part in asset ownership rather than price speculation by making or accepting purchase and sell orders with fixed quantities and prices.
Buyers have the option to either purchase from the sellers whose sell orders they find acceptable or to create their buy orders specifying the quantities and prices they want to pay and then wait for a seller to match.
A market spot trade is very much like a conventional spot trade. What sets this system apart is that neither the buyer nor the seller receives the token or the payment at the time of order matching; rather, they must wait for settlement to take place. The official trading of the token on the exchange may take place at this point. Consequently, investors are not allowed to make any short-term trades before the listing.
Market-ready Enduring
before purchasing Futures contracts for perpetual tokens that have not yet been released and can be traded on the perpetual market. Without actually owning the asset, users can speculate on its price by going long or short. Another sort of market that can be traded on platforms like Hyperliquid or Aevo is pre-launch perpetual contracts, which are perpetual futures contracts on tokens that have not yet been launched. Unlike market spots, this trading allows for leverage and incurs funding rates, allowing for more intense token trading.
The token trading market before TGE
One growing trend in the cryptocurrency industry, largely associated with airdrops, is the pre-TGE token trading market. Before its listing on official exchanges, What is the market in crypto, users have the opportunity to purchase and sell project tokens.
- Participants: Those who received airdrops or were early investors in pre-sale rounds
- Investors seeking early access to new ventures are the buyers.
If the promised sum can be paid before the due date, though, anyone can become a vendor. The user base and trade volume of pre-TGE platforms are expanding at a rapid pace.
Currency exchange
To measure user engagement on their platforms, numerous projects are introducing point systems in addition to pre-TGE. These points do not have any monetary worth on their own, but the enterprises that are issuing them can turn them into tokens for loyalty incentive programs.
The point market is a platform where users can buy and sell points for various cryptocurrencies. Locking assets for a specified period is typically required, but otherwise the method operates similarly to pre-TGE.
Also Read: Blockchain helps Bitcoiners invest
When you buy points on Whales Market, you’ll get the same number of tokens in return, and when you sell, you’ll need to put down the same amount. For some tokens, the platform also allows for over-the-counter trading.
Benefits and drawbacks of pre-market
The Benefits
- Prepares projects for official listing by assisting with pricing decisions based on supply and demand in the market.
- Raises the profile of the token among potential investors.
- Facilitates the purchase of tokens by investors at prices that may be lower than those listed officially.
- Allows users to jump on trading opportunities and secure favorable positions early on.
- Creates interest in the coin among potential buyers and sellers on exchanges before it is officially listed, which boosts fees and attracts more users.
Negative Points
- Poor market liquidity makes buying and selling in bulk a challenge.
- Market sentiment can cause token prices to change a lot.
- Decisions to invest could be impacted if investors do not have all the necessary information about the project.
- Possibilities for legal action: In areas where there aren’t yet established rules for pre-market trading, there is a greater chance of legal trouble.
- Investors’ options are sometimes limited because they only support limited orders.
- The pre-sale prices of tokens can differ across different exchanges.
Futures Markets for Pre-Market Trading
The AEVO
For optimal Perpetual and Options trading, Aevo employs Optimism’s OP Stack technology. Among the platform’s pre-launch futures contracts, SEI was the first token to be traded.
The addition of seven additional tokens, including BLAST, JUP, and JITO, to Aevo’s pre-launch futures portfolio, piqued the community’s curiosity. One of them, JUP, has grown sevenfold since the introduction of the pre-launch contract. Token contracts issued by Aevo before their introduction include unique characteristics, such as 0.5x initial margin, 2x maximum leverage, and 0.48x maintenance margin. Aevo charges a fee between 0.1 and 0.25%. The prospective Blast, EigenLayer, Ethena, and Wormhole projects are what bring in investors to Aevo.
Liquid hydration
The pre-launch Perpetual feature is what makes Hyperliquid stand out. With room to grow, the exchange now supports more than 130 tokens from different ecosystems. With a decentralized listing model in place, the platform’s validators must reach a consensus.
Among HyperLiquid’s standout features is its unique network, which powers the platform’s lightning-fast processing, minimal slippage, and cheap transaction costs. However, with just one market token, EIGEN from EigenLayer, Hyperliquid’s portfolio of market assets is somewhat small.
The whale market
From its humble beginnings on the Solana network, the multi-chain OTC and pre-market trading platform Whales Market has grown to include support for Ethereum, Base, and Arbitrum. Whales facilitate the trading of assets before their formal listing, which is frequently associated with airdrop events. The platform has generated approximately $146 million in volume since its introduction in January.
One notable aspect of the wholesale market is the utilization of smart contracts for the management of pre-market and over-the-counter transactions. In addition to guaranteeing automation, transparency, and high security on the platform, this also removes the need for third parties.
The pre-market, over-the-counter, and points markets are the three primary offerings of the Whales Market. Major projects including Starknet, Wormhole, and Aevo have found success with the pre-market trading function on the Whales Market.
Bitget was
With the April debut of Bitget pre-market, investors have the opportunity to trade before the official market opening. Among the more than 150 initiatives introduced at Bitget’s pre-market are Catizen (CATI), EigenLayer (EIGEN), Zerolend (ZERO), Notcoin (NOT), and ZkSync (ZKSYNC)…
“Makers” (those who create orders) and “Takers” (those who match orders) engage in competitive fees-based trading, with makers paying 0.02% and takers 0.06%.
The By bit
A market feature is available on Bybit in addition to the usual fare of spot, futures, and perpetual contracts. With Bybit’s market feature, customers can trade new cryptocurrency pairs over-the-counter (OTC) before the exchange officially lists them.
Users can take on the role of either makers or takers, with a fixed amount of money needed to secure the trade on both ends. Rather than relying on smart contracts, the Bybit team personally verifies and oversees all market activity to guarantee security.
Notable projects funded by Bybit’s market feature include Aevo, Wormhole, Kamino, Taiko, IO, and 15 more. With a total trading volume of $1 million for AEVO tokens and the Whales Market at about $300,000, the Bybit market gained attention.
KuCoin was
KuCoin has created a platform where new cryptocurrency projects can be traded early on. Potential tokens can be accessible to investors using this approach before their formal listing. It comes with a bunch of cool features:
- Trade is made flexible when users are given the freedom to decide on their trade volume and pricing.
- Sellers are given a specific amount of time following the project’s formal launch to transfer tokens, allowing for flexible delivery time.
- To safeguard the transaction, a portion deposit is necessary.
- Fairness in trade is guaranteed by a clear process with defined standards and detailed recommendations.
Currently, KuCoin supports 17 projects such as ETHFi, Manta Network, Pyth, TIA…
Gate.io platform
To give people more investment alternatives, Gate.io debuted its market service in 2021. Before a coin is formally listed and traded on an exchange. This feature gives investors a chance to participate in new initiatives.
Participants in Gate’s market exchange can now buy and sell DOGS, GM, HMSTR, EIGEN, and more.
Further Information: Cryptocott