Saturday, December 4, 2021

Safe Swap Strategy for Holofuel

Dear traders,

Currently, we trade Holotoken (HOT), an ERC-20 token. When the Holo company announces the swap of HOT for Holofuel (HF), the news is bound to increase the price of HOT. I'd like your insights to prepare for this event. I listed a few options for you.

I. Strategies

A) All-In When the swap actually starts, change all HOT to HF. Sometime later, HF will be traded on exchanges just like HOT, but its price will be unpredictable.

B) Backstab Whale Don't swap HOT for HF at all. Sell it all for crypto or fiat of your choice when the price is highest. When HF appears on exchanges, buy it back.

C) Cut It In Half Swap half of your HOT for HF. Keep the rest in normalfag crypto, fiat, whatever, trade it. You may even buy back more HF with the other half.

II. Pros and cons of strategies

ABC are all viable, depending on circumstances.

  • 1) What is the initial price of crypto newly introduced to an exchange like Coinbase or Binance? Do all newbies start from zero? If the initial price is not zero or rises too fast to catch it early, or your capital is on the wrong exchange, then A is the best strategy.

  • 2) If Holofuel starts from zero value and you can tell ahead where HF gets listed, then B, Backstab Whale, is the best way to raise capital and then buy even more HF.

  • 3) Strategy A also means that your capital in Holofuel won't be tradeable until the new Holofuel tech is introduced to exchanges. That means a loss of opportunity. Depending on this delay and uncertainty, C is the best strategy.

III. Swap period

The swap period will last 6 months. During this period, traders will have options to swap HOT for HF. That means the supply of HOT will decrease. That COULD mean the price of HOT will rise. After the end of the swap, HOT will go down sharply because it will essentially be just another shitcoin with no real use.

At the end of the 6-month period, the supply of HOT will be the least and therefore the price of HOT MIGHT be the highest. A good time to cash out for the B or C strategies. Am I mistaken? Is the initial hype of the swap likely to drive the price even higher?

IV: Long term

One concern for HF is that the coin will rise, but not as sharply as let's say, Bitcoin. It's not a deflationary or inflationary coin, it's a flexible supply stablecoin, one of the first of its kind. Its value will be kept under certain limit, i.e. the Holo company will offer their HF for a certain price at their exchange, in case the price goes up too much. That raises concern whether HF is the right coin for trading. In theory, the price could be translated to the whole AWS market capital, but in practice nobody knows. There are plenty of speculations online. However, catching another rise of HF is good regardless.


No comments:

Post a Comment