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Crypto Terms:  Letter P
Jun 19, 2023 |
updated Apr 02, 2024

What is Private Sale?

Private Sale Meaning:
Private Sale - a private early-stage investment opportunity for a limited number of strategic investors.
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Let's find out Private Sale meaning, definition in crypto, what is Private Sale, and all other detailed facts.

A private sale is a sale of coins or tokens to a limited number of early investors. These sales are typically unscheduled and hidden from the general public. Private sales are organized by blockchain companies. The companies determine which investors they want to invite. The idea is to get early investors to support a certain project in exchange for cryptocurrency that has the potential to generate substantial profits.

Private sales benefit both investors and businesses because:

  • Institutional investors can provide large cash to businesses. This allows them to build various projects.
  • In comparison to the traditional crowd and public sales, investors obtain significantly lower crypto prices.
  • The discounted rates indicate that, when the coins are distributed to the general public, there is a chance of receiving quick and significant returns.

However, private sales have been criticized for excluding average investors. Besides, concentrating large amounts of cryptocurrencies in the hands of a few individuals exposes the coins or tokens to price manipulation. In addition, the tokens are exposed to various schemes such as the Pump and Dump (P&D) scheme.