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Educational Post
What Are Crypto Pre-Markets?
Since the crypto markets operate 24/7, the term pre-market has a different meaning. Crypto pre-markets refer to trading platforms where investors can trade tokens before they are officially launched or distributed to the general public.
Typically, traders use crypto pre-markets to speculate on the value of tokens, buying and selling based on their projected worth post-launch. However, crypto pre-markets are not limited to tokens. In some cases, they allow the trading of "protocol points" that might serve as criteria for future airdrops.
How Do Crypto Pre-Markets Work?
Crypto pre-markets work similarly to peer-to-peer (P2P) trading platforms but are distinguished by their focus on tokens that are yet to be launched. Crypto pre-markets can offer investors an opportunity to trade tokens during the interval between the allocation announcement, token distribution, and official listing on a trading platform.
For instance, consider a new cryptocurrency project that announces the release of its token through an initial exchange offering (IEO). Before the tokens are officially distributed and listed on exchanges, the project opens a pre-market phase on a decentralized platform where early investors can trade the unreleased tokens. This trading activity provides early price discovery and liquidity, allowing traders to gauge market sentiment and set preliminary valuations for the project’s token. Centralized exchanges (CEXes) can also offer crypto pre-market trading, acting as custodians for the transactions.
What Are Crypto Pre-Markets?
Since the crypto markets operate 24/7, the term pre-market has a different meaning. Crypto pre-markets refer to trading platforms where investors can trade tokens before they are officially launched or distributed to the general public.
Typically, traders use crypto pre-markets to speculate on the value of tokens, buying and selling based on their projected worth post-launch. However, crypto pre-markets are not limited to tokens. In some cases, they allow the trading of "protocol points" that might serve as criteria for future airdrops.
How Do Crypto Pre-Markets Work?
Crypto pre-markets work similarly to peer-to-peer (P2P) trading platforms but are distinguished by their focus on tokens that are yet to be launched. Crypto pre-markets can offer investors an opportunity to trade tokens during the interval between the allocation announcement, token distribution, and official listing on a trading platform.
For instance, consider a new cryptocurrency project that announces the release of its token through an initial exchange offering (IEO). Before the tokens are officially distributed and listed on exchanges, the project opens a pre-market phase on a decentralized platform where early investors can trade the unreleased tokens. This trading activity provides early price discovery and liquidity, allowing traders to gauge market sentiment and set preliminary valuations for the project’s token. Centralized exchanges (CEXes) can also offer crypto pre-market trading, acting as custodians for the transactions.