In recent weeks 3 exchange coins, in particular, have seen spectacular gains and the good news is – this might be just the beginning.
Binance 3 Month Chart – up 232%
https://coinmarketcap.com/currencies/binance-coin/
Huobi 3 Month Chart – up 115%
https://coinmarketcap.com/currencies/huobi-token/
KuCoin – 3 Month Chart – up 163%
https://coinmarketcap.com/currencies/kucoin-shares/
The theme that binds these three coins beyond being exchanges is the recent issuing of exchange offerings. These Initial Exchange Offerings (IEOs) function very like an Initial Coin Offering (ICO) and have generated a lot of enthusiasm for the exchanges hosting them. Critically, IEOs offer a use case for the exchange token beyond simple speculative exchange volume trading. The exchange could stagnate in terms of coin pairs and volume but the exchange token could continue to accrue or hold value as a medium for IEOs (think Ethereum 2017).
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A quick comparison of project fund-raising would seem to favour the exchange model.
| ICO | IEO |
| Token launched on the website site of issuer | Token launched on exchange |
| Project team – issues and manages smart contract | Exchange issues and manages smart contract |
| KYC/AML carried out by project | KYC/AML supervised by exchange |
| Marketing burden/cost – high | Comparatively low – exchange promotes launch |
| Team vouch for ‘themselves’ | Exchange performs due diligence to weed out scams |
| Exchange listings needs to be arranged | Exchange automatcally lists promoted project. |
More in-depth information on IEOs can be found here.
Caveats
This may well be a bubble and fizzle away as launched projects fail to deliver promised products.
The IEOs themselves have not proven good investments post-launch – only pre-sale investors have seen positive returns.
Investment Thesis
All three exchange coins are a buy on a dip recommendation. The market is currently poised with BTC set to move significantly in either direction in the coming weeks.
I already hold these coins but I’m looking to add more on a dip.
Entry / Target (BTC values) / Stop
Binance – 0.00381 / 0.0099 / 0.0024
KuCoin – 0.0003 / 0.00049 / 0.00018
Huobi – 0.00051 / 0.00078 / 0.00029
I’m not being ambitious here and may review my exit points in the coming weeks.
I’ve left loose stops to account for pending market volatility. If I do get stopped out – I’ll likely be looking to buy back in if the fundamentals of IEOs remain supportive
If I were to choose only one, it would be BNB as the coin has more supportive fundamentals than the other two exchange coins.
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