New Investment Trend - Exchange Tokens for Quick Profits
Binance Coin (BNB) is currently the leading exchange token however Huobi is following in its footsteps with their own exchange coin, Huobi Token with more than 100 percent price increase in 2019. Used as an alternative to trading fees on their respective exchanges, exchange cryptocurrencies are also commonly paired with other cryptocurrencies to form new markets and increase overall liquidity.
Binance recently has gone one step further and created a new demand driver for its token by requiring participants of its token sale platform Binance Launchpad to make purchases either with bitcoin (BTC) or BNB. Read more about Binance Launchpad in an interview with Gleb Kostarev .
While that is likely not the only cause for BNB’s near 200 percent surge this year, the cryptocurrency’s growth just cannot be ignored by the other exchanges. It would be expected to see others follow suit soon as well. Is there a coinbase token in the works perhaps?
Huobi is creating a token sale platform of its own called “ Huobi Prime .” Not only will Huobi Prime enable purchases via its native token HT, the platform will take things one step further by allowing purchased tokens to be instantly tradeable in HT markets. This rivalry between exchanges could possibly bring us new and interesting financial products. Or it could go over the top completely, who knows.
Set to go live on March 26 for the sale of Top Network (TOP), the new demand drivers for HT have seemingly revved up investor interest, at one point having increased nearly 40 percent in price over the past two days alone.
That said, HT’s market began to take a bullish turn well before Huobi Prime was announced, a trend similarly seen on the price charts of other native exchange tokens.
BNB is still the best performer or the group now up 145 percent year date, at the time of writing this article, but HT is quickly becoming a contender while boasting a 123 percent price increase. The performance of Kucoin Shares (KCS), the cryptocurrency native the KuCoin exchange is also reporting notable year-to-date growth of 69 percent.
A recent surge in HT trading volumes also makes the newfound interest in the exchange coin apparent. In the last 24 hours alone more than $170 million worth of HT has traded hands – a value close to $50 million more than its entire market capitalization of $125 million, according to CoinMarketCap .
If Huobi Prime attracts interest comparable to the Binance Launchpad, other exchanges are expected to follow suit. In this sense, adopting a strategy of buying into exchange tokens early on may be a rather profitable one short term
What to Invest in 2019?
End of 2018 investors and crypto enthusiasts were positive about STO’s however there is another way - IEO’s, IAO’s, .
Initial Exchange Offering, means a project gets listed on an exchange directly without going through an ICO. We see more of these types of token issuing in countries where ICOs are restricted. There is a fundamental problem with IEOs, though. Namely, a high percentage of coins are held by a small number of people.
After listing on an exchange, if the price goes up, then a small number of people would have made far more profit than the rest. If the price goes down, that means the small number of holders are selling heavily (potentially taking profit or stop-loss), and all the new investors (buyers) are at a loss. Either way, a small number of people benefit at the expense of a large number of retail investors.
Honestly, other than a limited few forks which are genuinely trying to improve upon the bitcoin protocol, most forks are… reverse scams. They leverage human greed to get freebies: “Let me give you something (that isn’t worth any value) for free, and if enough people receive it, and start to trade it, then it may suddenly have some value, for a short while.”
Exchanges are “forced” to support them or risk users moving coins to other exchanges who do. As exchanges begin to support them, they increase in “liquidity/price”. This becomes an easy way to force exchanges to list your coin, for a while at least. But this period has probably passed. This has caused controversy - some exchanges chose not to support some forked coins at the beginning such as Bitcoin Gold and Bitcoin Cash for example. This made traders rather upset as they watched the prices climb.
The solution? Just wait till there are 1,000 useless forks, so much that any individual or even an exchange will not be able to install that many wallets. Most of the prices will be at or near 0, and users will stop asking for forked coins (candies as they are called in China). Luckily, I think we are finally getting there.
Initial Airdrop Offering is similar to IFO in some ways, but are more flexible in the way they distributed the initial coins. Historically, this created problems for users who store their coins on exchanges, missing out on the airdrops. But Binance has changed that. Binance can work with airdrop teams to ensure users on Binance get the same airdrop as any regular user. In fact, it is easier for the user as they don’t have to install any new wallets to receive the airdrop.
Disclaimer: This is not investment advice. The opinions and facts pointed out are simply to guide our readers. Trading cryptocurrencies is risky and may result in losing some or all of your investment.