As a seasoned analyst with extensive experience in the crypto market, I find Flow’s research on the profitability of new altcoins listed on Centralized Exchanges (CEX) like Binance both intriguing and concerning. The data presented suggests that new tokens listed on these platforms have seen a significant decline in value and performance over the past six months.
A researcher known as “Flow” on X (previously Twitter) has conducted an in-depth analysis of the profitability of newly listed altcoins on centralized exchanges, including Binance. The researcher revealed that prominent exchanges like Binance have seen a marked decrease in the worth and effectiveness of new tokens added to their marketplaces.
80% New Listed Altcoins On Binance Are Down
According to Flow’s reports, the profitability of newly listed tokens on cryptocurrency exchanges has decreased significantly. An analyst examined Binance’s listings from the previous six months and found that approximately 80% of these new altcoins have experienced substantial declines, causing their values to drop below their initial listing prices.
From November 2023 through May 2024, the majority of these listed tokens were available on Binance. Among them was BLUR, which joined the platform on November 24, 2023, and experienced a significant decline, losing approximately 45.6% of its value.
Among the tokens that were listed at the start of 2024, with the exception of two, every one has experienced a decline in value. The token with the most substantial decrease was PORTAL, which lost approximately 69.2% of its value since it was listed on February 20, 2024.
Four out of the 32 freshly-listed cryptocurrencies on Binance showed substantial price growth. The meme coins Ordinals (ORDI) and Dogwifhat (WIF) registered the most impressive increases, with gains amounting to 261.9% for ORDI and 117.69% for WIF. Meanwhile, Jito (JTO) and Jupiter (JUP) also experienced notable growth, surpassing a 50% increase.
If an investor had evenly distributed their investments among Binance’s recently introduced tokens during the previous six months, they would have experienced a considerable loss amounting to approximately 18%.
A macro analyst pointed out that when cryptocurrency tokens debut with a high Fully Diluted Valuation (FDV), they often experience price drops and fail to meet expectations. He revealed that the majority of tokens listed on Binance have strong backing from Tier 1 venture capitalists, leading to steep initial prices. Consequently, there is heavy profit-taking, causing a substantial decrease in value.
New Tokens Have No Real Users
As a crypto investor, I’ve noticed Flow’s take on new altcoins launched on Binance. According to his analysis, the high fully diluted valuations (FDV) at launch erode most of their potential upside for investors like myself. In simpler terms, these newly listed coins seem more profitable for insiders looking to exit quickly, rather than providing attractive entry points for retail investors seeking solid investment opportunities.
A crypto analyst revealed an issue with new cryptocurrency projects on Binance, stating that they often lack real users or a solid community base. Moreover, their initial high fully diluted valuation (FDV) can result in unrealistic growth, potentially damaging the reputation of the entire crypto sector.
As a crypto investor, I’ve come to realize that investing in newly listed tokens can feel like playing an unfair game, according to Flow’s perspective. Economist Alex Kruger echoed this sentiment, stating that the process is not as straightforward and transparent as it may seem.
As a seasoned market analyst, I’ve observed that many new token launches in the current market are designed primarily for price manipulation, which eventually leads to a downward spiral. This trend stems from founders who establish short vesting periods for their teams, inflate metrics artificially, and prioritize generating hype over user acquisition.
Kruger disclosed that automated trading systems and market makers gain an edge over regular investors by purchasing vast quantities of tokens during initial launches and subsequently selling them for substantially increased prices.
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2024-05-19 03:11