Understanding Investment through Private and Public Sales - Part 3

in hive-175254 •  4 months ago 

Hello everyone, hope you all are doing good? I'm back with the Part 3 of this amazing series, Understanding Investment through Private and Public Sales. If you haven't read the Part 1, I strongly suggest you that by clicking here and here for Part 2. In today's article, we would be looking at Private Sales, Pre-Sales and Public Sales in the world of cryptocurrency.


bitcoin-token-with-stock-market-crash-behind-it.jpg

Source


Private Sale in Cryptocurrency


Private Sale is the first phrase where crypto projects tries to raise funds for the project. The project selects some investors into a private event where they will be offered the tokens at a very cheap rate. The general public are usually unaware of this event.

In other words, Private sale involves project selecting some investors to invest in their project by showing the investors the roadmap and the value which project will bring to the crypto space. Funds raised will be used to fund the development of the project and the investors in return will get a huge sum of the tokens.


Benefits

  • Investors could make massive profit on their investment, if the project becomes successful in the future.

  • The projects get funded and will be able to carry on with the development of the project.

  • Investors buy the tokens at a discounted rate when compared to presale price and public sale price.


Risks

  • Investors could easily lose their investment, as the project is still in it's early stage and might stop operation.

  • Investors investment are locked as they are unable to make withdrawals because the tokens are yet to be listed on an exchange.

  • There's no privacy as the project will perform complete KYC verification on every investor selected.

  • Limited only to those investors selected.


Pre-Sale in Cryptocurrency


Presale sale is the second phrase after Private sale, where crypto projects raise funds for the project. Unlike the private sale, the presale is less private and also not completely public. Presale are usually found on the project's official site or sometimes on a crypto lanchpad.

The presale price is higher than private sale but still cheap. This will keep the investors that invested in the private sale, in good spirit for a bright future as they are already noticing unrealized profits from their investment already,

Funds raised in this second phrase, are used to fund some developments of the project as they get closer to the launch of the token.


Benefits

  • Investors could make massive profit on their investment, if the project becomes successful in the future.

  • The projects get funded, to finalize some developments of the projects as the launch is getting closer.

  • Tokens bought by investors in phrase are at discounted rate when compared to the public sale price.


Risks

  • Investors could easily lose their investment, as a successful pre-sale doesn't guarantee the success of the token.

  • Limited spots are available, hence, some many investor who wished to be part of this phrase might be unable to be a part.

  • Tokens are locked as they are not yet listed on an exchange, hence, investors funds are locked.

  • There is usually a minimum investment capital for investors, so if an investor doesn't have the minimum investment capital, such an investor will be unable to participate at this phrase.


Public Sale in Cryptocurrency


Public sale is the third and final phrase of fund raising by the project. It is also known as Crowd sale, as the project makes this phrase open to the general public. Anyone can join in at this phrase.

The public sale price is higher than both the private sale and pre-sale, hence, a feeling of excitement from both the private sale and pre-sale investors.

The public sale is carried out almost just before the coin will get listed on the exchange, this is the final opportunity for investors to buy the coin at a lesser rate before the launch.


Benefits

  • There is no KYC verification for investors, as anyone can join this phrase.

  • There is already liquidity available at this phrase, hence, investment capital are no longer locked.

  • Less risk for investors, as investors would have seen the progress and development of the project from the private sale to the pre-sale and make a better judgement on whether to invest or not.

  • The projects get funded for the final time and will use the funds to continue the development and marketing process for the project.


Risks

  • Investors buy at a higher rate when compared to the rate by bought the private sale investors and pre-sale investors.

  • The token price might fall as private sale investors and pre-sale investors can now be able to realize their profits as their funds are no longer locked, hence, a dump in price might likely occur at this phrase

  • Investors might buy at a higher rate than the rate when it gets listed on an exchange, as many investors will most likely dump the price.


0_UK8tFeUNjwMcfjLM.jpg

Source


⚫️⚪️⚫️

Thanks For Reading

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!