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

More than 80% of newly listed cryptocurrencies on Binance, the world's largest digital asset exchange by trading volume, have dropped in value.

In the past six months, the value of these tokens has declined since their listing on the exchange, raising concerns among investors looking for the latest cryptocurrencies.

Most of the new Binance token listings are trading in the red

According to a May 17 post by a cryptocurrency researcher with the pseudonym Flow on JTO), and Duguevat (WIF).

Everyone is talking about the VC+CEX cartel where teams are paid to launch with the highest possible level of FDV on the tier 1 CEX and provide exit liquidity for VCs and insiders.

The result: new coins are not a great investment anymore

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

– Flow (@tradetheflow_) May 17, 2024

Despite the lack of venture capital (VC) backing, the Ordi token has been the most profitable, with an increase of over 261% since its launch. Controversial meme Dogwifhat came in second place, rising by more than 117%.

Flow noted that top-tier venture capitalists are backing most of Binance's new listings and launching them at inflated valuations. The average fully diluted valuation (FDV) on Binance's listing date exceeds $4.2 billion, with some tokens reaching over $11 billion. Often times, 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 more than 18%. Flo adds that this suggests that many of the tokens being launched on Binance are not viable investment vehicles, as their upside potential has already been exhausted. Instead, they serve as a liquidity exit for insiders who take advantage of individual investors' limited ability to access early investment opportunities.

Flow also criticized current market dynamics, citing economist Alex Kruger's previous remarks about X. Kruger male 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.

Launching a new token causes damage to the market

According to cryptocurrency researcher Flow, the current definition of token launch is hurting the cryptocurrency market, and a new approach to token launch is needed. Issuing tokens at high, fully diluted valuations (FDVs) erodes value and reduces interest in the market, ultimately causing the token to decline. He added that this approach not only harms cryptocurrencies, but also tarnishes the reputation of the entire cryptocurrency industry.

highlighted earlier mail By Crypto_McKenna, who criticized the practice of paying protocols to launch at high FDVs to benefit pre-seed and seed investors. Launching at a lower FDV allows secondary market traders to take advantage of repricing and helps generate momentum and interest, McKenna noted.