Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert & block trade
Convert crypto with one click and zero fees
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Over 80% of Newly Listed Crypto Assets on Binance Have Declined in Value: Data

Over 80% of Newly Listed Crypto Assets on Binance Have Declined in Value: Data

CryptopotatoCryptopotato2024/05/18 04:28
By:Wayne JonesMore posts by this author

According to the analyst, most new tokens on Binance are listed with an inflated valuation despite lacking a substantial user base.

Over 80% of the newly listed cryptocurrencies on Binance, the world’s largest digital asset exchange by trading volume, have declined in value.

In the past six months, these tokens have plunged in value since listing on the exchange, raising concerns for investors seeking out the latest cryptocurrencies.

Most New Binance Token Listings Trading in Red

According to a May 17 post by pseudonymous crypto researcher Flow on X, only five of the 31 tokens analyzed have appreciated in value: the meme coin (MEME), the Ordi token (ORDI), Solana-based Jupiter (JUP), Jito (JTO), and Dogwifhat (WIF).

Every one is talking about the VC + CEX cartel where teams are pushed to launch at the highest possible FDV on tier-1 CEX and provide exit liquidity for VC and insiders

The result: New coins are not great investment anymore

But how real is this? I crunched the number for you 👇

— flow (@tradetheflow_) May 17, 2024

Despite lacking venture capitalist (VC) backing, the Ordi token was the most profitable , with an increase of over 261% since its launch. The controversial meme coin Dogwifhat followed in second place, surging more than 117%.

Flow noted that top-tier venture capitalists back most new Binance listings and launch at inflated valuations. The average fully diluted valuation (FDV) on the Binance listing date exceeds $4.2 billion, with some tokens reaching over $11 billion. Often, these projects lack real users or a strong community.

According to Flow, if investors had made equal investments in each of the new Binance listings over the past six months, their portfolio would have declined by over 18%. This, Flow adds, suggests that many tokens launching on Binance are not viable investment vehicles, as their upside potential is already exhausted. Instead, they are exit liquidity for insiders who exploit retail investors’ limited access to early investment opportunities.

Flow also criticized the current market dynamics, citing economist Alex Kruger’s earlier observations on X. Kruger noted that many tokens are designed to pump and then dump due to short vesting schedules, fake metrics, and a focus on hype rather than user acquisition.

New Token Launches Causing Market Harm

According to crypto researcher Flow, the current token launch meta is damaging to the crypto market, and a new approach to token launches is needed. Releasing tokens at high, fully diluted valuations (FDVs) leads to value erosion and minimal market interest, ultimately causing the token to plummet. He added that this approach not only harms the token but also discredits the entire crypto industry.

He highlighted an earlier post by Crypto_McKenna, who criticized the practice of pushing protocols to launch at high FDVs to benefit pre-seed and seed investors. McKenna noted that launching at a lower FDV allows secondary market traders to profit from repricing and helps generate momentum and interest.

You Might Also Like:

  • Binance Faces Stiff Competition as This Bitcoin Metric Declines: Kaiko
  • Binance Halts Nigerian Naira Transactions, Compliance Concerns Intensify
  • Binance Labs Quietly Transitions to Independent Entity From Binance
0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like