A Token with a Price Floor

sunnysideupfang (55)in #bitcoin • 6 years ago

We all know participating in ICOs is always risky. Actually participating in any investment is pretty risky. But if you’ve participated in an ICO that went horribly wrong, you might have thought that the company should just buy back the tokens. It makes sense that if a company really believes in their product and the tokens fall to 0.2x, they score some instant profit. This should be easily possible for companies that have raised far above soft cap.

CountingHouse has already stated that it will buy back tokens if they dip too much. CountingHouse is a hedge fund that trades fiat but is now going to start trading cryptocurrencies too. The fund’s team has said that if the CountingHouse Token price falls below the liquid price of the fund, they’d buy back tokens.

Price Floor

The percentage of total circulating CountingHouse Tokens a person has gives the person that much percentage of ownership in the fund. The tokens are backed by the liquid value of the fund. So if the tokens fall below the liquid value they are backed by, the fund makes instant profits by simple buying back the tokens. Usually tokens purchased in an ICO have no limit to their bottom price. The token price can go to zero even, but in this case the money raised in the ICO is being pooled into a fund that will be used for trading. That money backs the token value. This gives CountingHouse Tokens a reliable price support as there is a point at which they cannot go too low as the fund would buy out the dumpers.

There is still a risk involved since the tokens are backed by only the liquid value of the fund. So any drop in the fund’s liquid value would make the tokens worth less automatically. But the CountingHouse team has a really good track record and they’ve given their clients great returns so far. And their crypto trading so far has produced great returns.