- VeChain Foundation Steering Committee to buy back $25 million worth of VET tokens
- The buyback could have been triggered by the belief that VET tokens are underpriced
- Conflicting opinion on Twitter and Reddit community about VeChain’s proposed repurchase
In a tweet on June 30, 2019, VeChain Foundation, a non-profit organization revealed that the VeChain Foundation Steering Committee has decided to buyback $25 million USD worth of VET tokens over the next 12 months. According to the organization, the re-purchase is in a bid to encourage the ecosystem builders for long term success.
Sunny Lu Announces Buyback of VET Tokens
Per the tweet, Sunny Lu, VeChain’s CEO during an AMA (Ask Me Anything) marathon announced that the VeChain Foundation Steering Committee has made a decision to conduct a VET buyback of $25 million USD over the next 12 months.
According to the non-profit organization, the repurchase of investors shares will be used to incentivize the ecosystem builders for long term success.
VET is the 28th largest crypto asset by market cap and it is currently priced at $0.0083. There are expectations that VeChain’s re-purchase of some tokens in circulation could potentially impact on the price of the virtual asset.
Buyback Due to Belief that VET Tokens are Underpriced
An issuing company’s buyback, on the other hand, usually occurs for several reasons and notable among them is the company’s belief that their asset is under-priced.
As such, they could repurchase it from investors and wait to resale it to the market when the asset’s price has corrected.
Twitter Community Comments on Potential Buyback of Virtual Asset
The VeChain community has also made comments in direction to the news, and a closer look at these comments shows mixed reactions.
While some agree that it will do the VET tokens a lot of good, others have remarked that revealing the buyback will only help to pump its price which may not help in the long run.
For instance, a Twitter user was quick to note that each time a company carries out a buyback, something good comes out of it.
During the AMA marathon, Sunny announced that the VeChain Foundation Steering Committee decided to conduct a VET buyback plan up to $25 million USD over the next twelve months! The buyback will be used to incentivize the ecosystem builders for long term success.
— VeChain Foundation (@vechainofficial) June 30, 2019
Another Twitter user opined that they will not be buying back the VET tokens. Instead, they will put it up for sale until they see the virtual asset’s trading in double digits. The user, however, admitted that they are very confident in the long term success of the VeChain ecosystem.
Redditors’ Comments on Proposed Repurchase of VET Tokens
Like Twitter, the Reddit community has something to say. According to a Redditor, revealing that they are about to buyback may be counterproductive since the news could spike the asset’s price to a point that it becomes too expensive for VeChain to rebuy it.
“At current price this would mean they would be buying 2717391304 VET on the open market – that’s almost 3 billion. If the price stayed this low. That kind of buy order at once would empty the whole current Binance order book (around 500 million VET on sale until 154 sats)”
Despite the sentiment, it’s left to see how the market will turn out after a gradual purchase of VET over a one year period.
Blockchain Reporter also informed on June 25, 2019, that Walmart China has adopted VeChain’s blockchain for food traceability.