🤔 This may sound unreasonable, but in fact investment funds have many ways to take profits in advance of the investment without waiting for the project to pay tokens.
There are 2 popular ways:
1.1/ Hedging
1.2/ Wholesale and retail distribution & Buy low and sell high
📌1.1/ Hedging
🎯 I will take an example with $NEAR, this is a layer 1 blockchain project expected by many investment funds.
They have raised more than 433 million USD from investors such as a16z, Coinbase, 3AC, Dragonfly,... with token sale prices ranging from $0.0375 - $0.32/NEAR.
🚀 As for the token sale on Coinlist, the price is from $0.29-$0.4/USD. In conclusion, if the average price that investors buy NEAR is about $0.3, so far they are making a profit of about 300%.
🤑 To date, investment funds have received more than 236 million NEAR with a total current value of about 270 million USD.
✅ However, in reality this number can be much larger thanks to the Hedging strategy.
🚀 More specifically, when NEAR increased sharply from October 2021 to May 2022 with an average price of about $10/NEAR, investors had a profit of up to 3,333% compared to the average purchase price. is $0.3/USD.
1️⃣ To lock in such incredibly high profits, investors can immediately sell on the Spot market the tokens received from the time the project has been unlocked.
2️⃣ As for the number of tokens that have not been returned, they can open a short order on the Futures market, sell via OTC or borrow funds to sell,...
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🎯 For NEAR coin, Binance supports Spot market listing on October 14, 2020 and Futures listing on October 15, 2020, so opening Short orders is very easy for investment funds.
Of course, it is very difficult for investment funds to determine the peak of NEAR because it depends on the buying force of the market, but they follow the principle:
Pump hard then lock, sideway then collect 💪
🚀 However, in order to take profits, they will also choose a time when "the weather is favorable, the land is favorable, and people are harmonious".
More specifically, from October 2021 to May 2022 (at which time NEAR price increased sharply beyond $10), Near continuously had a lot of good news such as:
- October 2021: Launch of a 350 million USD ecosystem stimulus package.
- October 2021: Increase the ecosystem development package to 800 million USD (huge number!).
- December 2021: Near integrates Terra's Stablecoin UST.
- January 2022: Mobilize an additional 150 million USD from many large funds.
- 4/2022: Near ra mắt Stablecoin USN.
=> With so much good news in such a short period of time, I think investment funds have a strategy to take profits during this period 🤑
Buy the rumor sell the news 🚀
- For new investors, good news is news to invest
- For experienced investors, good news is news to take profits
🧭And I firmly believe that the fund will not miss the opportunity to take profits at good prices.
👌 This brings many benefits such as
- Take profit for tokens that have not been returned.
- Preserve profits from market fluctuations (For example, Terra and FTX collapse).
- If the price drops as predicted, they will also be able to reduce the time they have to bury their capital because now the profits from Short Futures can help them have more funds to reinvest.🥳
🤔 So what if they take profits and NEAR continues to increase?
- It's okay, with their average buying price being $0.3/NEAR, if they could close it at $10, that would be a very, very big profit.
- In the market, the number of coins with such strong growth can only be counted on the fingers of one hand such as MATIC, SOL, AXS, FLOW,... 💯
=> Therefore, it was very reasonable for them to take profits right at that price range!
- If not, they can profit from a small portion of the total number of tokens received in the future. However, if held until now, the profit has decreased quite a bit ⚠️