Stages a coin must go through to launch: Angel round -> Private placement -> Crowdfunding -> Launch on exchange (secondary market).
What is a private placement?
Core: Subscribe at an internal price far below the issue price before the coin goes public.
Advantages: Lowest prices, exchanges usually see huge price increases, theoretically the lowest risk and highest profit potential.
Current Status: Ordinary retail investors find it difficult to participate. Quotas are mostly monopolized by big players/institutions (hundreds of millions in quota, divided among dozens), who profit from the huge price differences after launch.
Proxy Investment: A model where large players split quotas and sell to retail investors for fundraising participation (Risk: relies on the credibility of the proxy investor).
Primary Market vs Secondary Market:
Characteristics Primary Market (Private Placement, etc.) Secondary Market (Exchange) Participation Phase Before Coin Launch After Coin Launch Price Extremely low (e.g., Ethereum private placement price $1.89) Public market price (high volatility) Profit Potential Theoretically highest (due to lowest costs) Relatively low Risk Characteristics Total loss risk from project failure; risk of proxy investment running away Price volatility risk; speculation sentiment risk Poor liquidity (long lock-up periods, slow monetization) Excellent liquidity (buying and selling at any time) Participants Institutions/large players/proxy investors Retail investors (need patience) All investors (many speculators) Nature Early-stage value investment Liquidity trading/speculation
Core Summary:
The primary market wins with low prices and great potential, but it has high thresholds, poor liquidity, and concentrated risks.
The secondary market wins with good liquidity and easy participation, but it has high prices, relatively low profit potential, and high volatility.
Warning: Investment carries risks, enter the market with caution! Private placements are not guaranteed profits; project failures can lead to total loss.
Simplified Key Points:
Clarified Structure: Clearly distinguish definitions, current status, and core comparisons.
Extracted Keywords: "Far below the issue price", "Big institutions monopolize", "Proxy investment", "Risk of total loss", "Poor/Good liquidity", "Low price with great potential/High volatility with many speculations".
Highlighted Core Comparisons: Use tables to visually display the core differences between the primary and secondary markets in terms of price, returns, risks, liquidity, and participants.
Retained Classic Case: Retain the shocking case of 'Ethereum private placement price $1.89' to illustrate potential.
Removed Redundant Descriptions: Cut phrases like 'One can imagine the astonishing multiples' and 'In short, it means' as transitional statements.
Strengthened Risk Alerts: Clearly point out the 'total loss risk of project failure' and 'the risk of proxy investment running away' in the primary market, and emphasize the warning again.
Terminology Clarification: Clearly define 'private placement', 'primary market', 'secondary market', 'proxy investment'.