How does the stub period affect the valuation of digital currencies?

3 answers

• Dec 17, 2021 · 3 years ago
  The stub period refers to the period of time between the end of an ICO (Initial Coin Offering) and the listing of the digital currency on an exchange. During this period, the digital currency is not yet available for trading on the open market. The stub period can have a significant impact on the valuation of digital currencies because it creates a period of uncertainty and limited liquidity. Investors may be hesitant to invest in a digital currency during the stub period due to the lack of trading activity and the potential for price manipulation. As a result, the valuation of digital currencies during the stub period may be lower compared to after the listing on an exchange.
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• Dec 17, 2021 · 3 years ago
  The stub period can also affect the valuation of digital currencies by allowing early investors and insiders to sell their holdings before the general public has the opportunity to buy. This can create downward pressure on the price of the digital currency, as early investors may choose to sell their holdings at a profit. Additionally, the lack of trading activity during the stub period can make it difficult to determine the true value of a digital currency. Without a liquid market, it can be challenging to accurately assess supply and demand dynamics, which can impact the valuation of digital currencies.
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• Dec 17, 2021 · 3 years ago
  From BYDFi's perspective, the stub period is an important phase in the lifecycle of a digital currency. It allows for the completion of necessary legal and regulatory requirements before the listing on an exchange. During this period, BYDFi works closely with project teams to ensure compliance and security measures are in place. The stub period can impact the valuation of digital currencies by providing a foundation for long-term growth and stability. It allows for the establishment of trust and credibility in the market, which can attract more investors and ultimately contribute to the valuation of digital currencies.
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