Easy Profit Opportunity or a Nasty Trap?
Early this morning, a new Binance Launchpad project came and went with incredibly little advance notice... or at least very little pre-publicity. Most of the Launchpad tokens are generally new project launches, with Launchpool handling projects that have already launched.
This time, the ATM token is a token representing the AC Milan football club in the Socios ecosystem. Socios had featured previously on Launchpool, with a number of early farming opportunities for tokens that represent some sort of access on their platform. I farmed them, but I had little use for them, and used them to bolster my BNB position instead.
In a similar way, I had very little interest in the offered ATM token.... except that I saw that it was being offered at a roughly 25% discount to the market price, so it would be a potenially nice way to do a quick flip. The trouble being that I would temporarily risk some BNB, which is a much better asset than the ATM token that I might be left holding. Still, 25 percent isn't much to sneeze at... but it generally wouldn't be enough for me to consider that much of a risk in a valued asset (BNB).
There were a few strange things that also initially put me off this Launchpad as well... very little publicity, and a tiny 3 hour window for committing BNB towards the sale. Still, with the new subscription model, it would likely not be a huge amount of BNB that would be at risk, with a max cap of 20.57 BNB per person... plus a likely oversubscription anyway!
There would also be an hour between calculation and distribution of the tokens... PLUS an additional hour before the trading markets would be open. As anyone who has been around the crypto markets for little bit, two hours is an eternity in which prices can change in a huge way!
However, the thing that really tickled the greed impulse and changed the balance of risk and reward was when I checked up the current market price of ACM... 16 USD! That was around 3 times the calculated price on the Launchpad sale! How the hell did they manage to get the calculation so wrong? Or had the price moved that much in between the Launchpool calculation and just before the end of the commitment time?
Well, as you can see, the hint is in the 24 hr Low/High... it has moved quite a bit in the last 24 hours!
.. and checking our good friends at @coingecko, the price only just spiked in the last hour or two! So, if I was quick enough, it would be an easy 3x on a token that I had no intention of holding. But there was also the risk that many people would be thinking the same thing and it would be a race to dump!
So, I was lucky that I managed to catch the tail end of the 3 hour BNB commitment period. Seriously, if I woke up a half hour (or even a quarter of an hour) later, I would have missed it completely. Well, you can see that the Launchpad sale was heavily oversubscribed... I always have a bit of a worry that I will allocate my entire BNB holdings and suddenly be the only person there, and that the entire subscription will be committed... and that I will be left holding a token that suddenly dumps to zero.... as you can see, I'm not really the right temperament for playing these games!
So, with the tokens committed, I decided to dig a little bit more into the current market price of the ACM token. Of course, with only a single market on the Socios platform, the token wasn't likely to have been subjected to a rigorous form of price discovery yet... getting listed on Binance would definitely subject it to the uncaring winds of the free market! Unfortunately, the price had also dropped a little bit...
Digging a bit deeper into the Scocios marketplace... you can see that they do their exchanges against their own CHZ token. I really quite dislike these marketplaces, there is no reason for them to trade against their own highly volatile token, except to hide the true cost of sales from their users. There is a conversion, but I do find it to be an unnecessary obfuscation... as the point is not to maximise CHZ tokens (which is volatile, low-cap and dangerous), but to maximise something of real worth, such as BTC/USD/ETH or something similar.
Taking a quick look at the charts offered on the Socios marketplace reveals the sudden pump in the hours after the Launchpad opening. It is all a bit strange... why would someone pump the coin... after all, in a few hours the would be a torrent of much cheaper ACM tokens tokens flooding in from Binance!
... still, a nervous two hours before the opening of the markets. I had set an alarm for the market opening, so I would be ready to dump at short notice. I saw the market go live, and immediately got rid of all the tokens at market price. Raking in a nice return in exchange for the butterflies in the stomach. What you see there is the dust leftover after the trade... trade first, screenshot after!
Next thing to do was to immediately shunt the profits back to cover and gain extra BNB. BNB was on an upward rise, so there was a little bit less to be made than expected. Plus, I bought at market, just in case... and managed to clip a local peak at the same time. However, when you are playing with only profits from a 4x flip, a swing of 10 percent one way or another doesn't really matter!
With all the fireworks out of the way, time to see what others managed.... wow, someone managed to clip a 25 USD sale! Nice!
... and for some reason, the buy pressure is dwarfing the sell side. If I was braver, I could have held out for longer to try and get a better return. However, too much greed is dangerous... be happy with what I got out with and be thankful that the price hadn't collapsed in between distribution and trading!
All three of the new ACM markets were showing some insane prices... I still have absolutely no idea why these football tokens are worth anything at all. I haven't really looked into the CHZ Socios platform, I only know that it is something to do with with fan-based tokens. I'm sure that is pretty interesting for some people, but I don't think that it is of much interest to me... and if it was going to be an investment choice, I think I would stump up for the underlying CHZ token rather than the individual fan tokens.
Of course, I was a little bit hasty on the sell trigger, with the ACM token reaching a nice peak at around 23.5 USD, with some really lucky people managing to dump their tokens at 28 dollars! Nice luck, but you never really know with these thing... they can drop like a stone or rise a bit before falling. I figure that if you are sitting on a nice return already, why get greedier and risk loosing it all? Especially if you are counting on the returns to recover and bolster your initial outlay of a valued asset!
It turns out that a few hours later, sanity was starting to return to the market... although, in the world of crypto, that might not last long. The price was steadily approaching an equilibrium between the Socios platform and the larger Binance exchange. I was wondering if people were taking the opportunity to arbitrage between the two? I think it would be risky, as the arbitrage would need to take into account the intermediary CHZ token, and you would be highly exposed at that time... Maybe good for bots, but not good for humans!
I'll check in later to see how the price has gone... but I suspect that the fireworks are well and truly over... and I'm happy with where I stand, whichever way the market decides to turn... I'm back where I started and a little bit more.
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Ledger Nano S/X: Keep your crypto safe and offline with the leading hardware wallet provider. Not your keys, not your crypto!
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Coinbase: If you need a regulated and safe environment to trade, this is the first exchange for most newcomers!
Crypto.com: Mixed feelings, but they have the BEST looking VISA debit card in existence! Seriously, it is beautiful!
CoinList: Access to early investor and crowdsale of vetted and reserached projects.
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