Preface
Binance is one of the world's largest cryptocurrency trading platforms. With its large user base, high trading volume and strong technical strength, it occupies an important position in the cryptocurrency market. Binance's announcements often have a significant impact on the entire market. Whether it is the launch of new projects or policy adjustments, they can attract widespread attention and market fluctuations, reflecting its leading position in the industry.
Recently, Binance released an announcement to recruit small and medium-sized projects to list on Binance, which attracted widespread attention. The purpose of this move is to promote the diversified development of blockchain technology and the cryptocurrency market, while providing a platform for more innovative projects to showcase and develop.
This article will provide a detailed analysis of Binance’s purpose, impact on investors, and changes in Binance’s strategies in recent years.
1. Binance’s Purpose
As the world's leading cryptocurrency trading platform, Binance has been committed to promoting the development and application of blockchain technology. The recruitment of small and medium-sized projects on Binance aims to discover and support more innovative projects with potential. This will not only help enrich Binance's project ecosystem, but also provide users with more diversified investment options. In addition, by introducing new projects, Binance can further expand its market influence and maintain its leading position in the industry.
1.1 Diversified project ecology
In the past few months, tokens with high valuations and low initial circulating supply have sparked widespread discussion in the cryptocurrency community. As more and more tokens are choosing to issue with a low circulating supply while reserving a large supply for the future. Since these tokens have limited liquidity for trading at the time of issuance, their prices may rise rapidly if the market conditions are bullish. However, when a large amount of token supply floods the market after unlocking, such price growth is obviously unsustainable. In this section, we will analyze the root causes of this trend.
The influx of private equity financing capital
As shown in Figure 1.1, overall, the chart shows that venture capital investment in cryptocurrency projects has experienced significant growth between 2017 and 2021, especially reaching an investment peak in 2021. Subsequently, although the quarterly investment volume fell back, the cumulative funds still maintained an upward trend, showing the market's continued attention and investment in the cryptocurrency field. It is worth noting that the investment peak in 2021 will have a profound impact on the current 2024, because many projects received a large amount of funds during the financing climax. Most of these projects only started token issuance this year, thus affecting the market structure in 2024. had an important impact.
Source: The Block, Binance Research图1.1
The market is extremely FOMO
In the first quarter of this year, extreme FOMO (fear of missing out) was very evident in the market and market sentiment was extremely positive.
As shown in Figure 1.2, in the first quarter of 2024, the number of downloads of the Binance mobile application exceeded 6.3 million times, significantly surpassing other major cryptocurrency and fintech platforms, reflecting the rapid growth of Binance's new users.
Source: Binance Figure 1.2
Figure 1.3 shows the price changes of Bitcoin and the inflows of Bitcoin ETFs. It can be seen that the Bitcoin ETF body has shown huge inflows. And as can be seen from the figure, the capital inflow of Bitcoin ETF increased significantly from mid-February to early March, which is consistent with the upward trend of Bitcoin price; from mid-March to early April, the capital inflow decreased significantly. , synchronized with the Bitcoin price correction; from mid-April to early June, capital inflows recovered and remained relatively stable, indicating that the market's interest and investment in Bitcoin ETFs gradually returned to stability, and also led to the return of market FOMO sentiment.
Source: TradingView Figure 1.3
As shown in Figure 1.4, the trend of Bitcoin price and Fear and Greed Index in the first quarter of 2024 is shown. The Fear and Greed Index was at a high level for most of the time, indicating that market sentiment was extremely optimistic, especially from mid-February to the end of April, when most days were in a state of "Greed" or "Extreme Greed". This shows that the market was driven by strong investor optimism during this quarter.
This market sentiment has led to more funds flowing into cryptocurrency projects, driving up project valuations and continued market activity.
Source: Coinglass Figure 1.4
Binance has been working hard to build a diverse project ecosystem, which includes not only well-known projects with high valuations, but also the support for small and medium-sized emerging projects. By recruiting small and medium-sized projects, on the one hand, it can change the mainstream trend of high-valuation and low-liquidity projects, and on the other hand, Binance hopes to tap into more innovative projects with potential and provide more choices and opportunities for platform users. These new projects usually have unique innovations in technology or new explorations in application scenarios, which can bring new vitality to the blockchain industry.
1.2 Support innovative projects
Through the recruitment announcement, Binance sent a clear message to small and medium-sized projects around the world: Binance welcomes and supports innovation. Binance will use its platform advantages and resources to provide these projects with necessary support and assistance, including but not limited to technical support, marketing and financial support. For these small and medium-sized projects, being able to list on the Binance platform means an opportunity to showcase themselves and grow rapidly, which will help attract more users and investors.
1.3 Enhance market influence
Introducing more small and medium-sized projects can not only enrich Binance's project ecology, but also enhance its influence in the market. Binance continues to launch new projects to maintain the platform's activity and attractiveness, further consolidating its leading position in the global cryptocurrency trading platform. In addition, the success of these new projects can in turn enhance Binance's brand reputation and market trust.
2. Impact on Investors
The core theme of Binance's move is to protect the interests of investors to the greatest extent possible, bring positive impacts to investors in many aspects, and promote the entire crypto market to develop in a healthier and more sustainable direction. First, investors will have the opportunity to access more emerging projects, expand their investment portfolios, and thus diversify risks. Second, small and medium-sized projects usually have higher growth potential, and investors who participate in these projects early may receive generous returns.
2.1 More investment options
Binance's announcement will provide investors with more investment options. In the past, many high-market-cap projects on the Binance platform have gone through multiple rounds of financing, and the highest price on the day of listing is the highest price of the coin, and many retail investors are taking over for institutions. This situation makes it difficult for ordinary investors to profit from it. However, by introducing more small and medium-sized projects, investors will have the opportunity to intervene in the early stages of the project and enjoy the dividends brought by the project's growth.
2.2 Diversify investment risks
By investing in more small and medium-sized projects, investors can effectively diversify investment risks. Small and medium-sized projects usually have higher growth potential, but also come with higher risks. By diversifying investments, investors can reduce the risk of failure of a single project and increase the stability and security of the overall investment portfolio.
2.3 Potential rewards for early participation
Small and medium-sized projects are usually in the early stages of development. If investors can get involved in the early stages of the project, they will have the opportunity to enjoy the rich returns brought by the project's growth. Many well-known projects have experienced huge value growth in the early stages, and early investors have therefore received considerable returns. Through the Binance platform, investors will have the opportunity to access more such early projects, increasing the possibility of their investment returns.
III. Changes in Binance’s Strategy
In recent years, Binance has also made many adjustments to its strategy to better adapt to market changes and user needs. These changes are not only reflected in the selection of projects on its platform, but also in its efforts to protect users and regulate the market. As shown in Figure 3.1, the distribution of Binance Launchpool and Launchpad projects from 2019 to 2024 is shown. Through this figure, we can further analyze the changes in Binance's strategy from 2019 to the present.
Source: LoongDao Figure 3.1
3.1、2019-2020
In 2019 and 2020, Binance's new coin style showed diversity and strategicity. In 2019, Binance introduced projects such as AI, Layer 2, and multiple public chains, focusing on blockchain infrastructure construction, with moderate project valuations and initial circulation to ensure market stability. In 2020, Binance further expanded into the fields of DeFi and blockchain games, introducing projects such as Alpha Finance Lab, Injective Protocol, Axie Infinity, and The Sandbox, while emphasizing compliance and security, such as WazirX and Cartesi. Compared with 2019, the initial circulation of projects in 2020 has increased to meet market demand and provide better liquidity. This series of measures shows that while maintaining diversification, Binance is gradually focusing on the strategic direction of decentralized finance and blockchain games.
Source: Coinglass Figure 3.2
In addition, Binance’s community voting for currency listing activities launched at the end of 2017 has significantly improved user participation and loyalty, provided valuable exposure opportunities for new projects, and enhanced platform user stickiness, as shown in Figure 3.2. Interactive diagram of community currency listing activity application and cz. The open and transparent voting process improves credibility and fairness. The selected projects usually have a solid community foundation and user support, which improves the quality of the project and reduces the proportion of inferior projects. This mechanism not only increases platform activity, but also promotes the development of high-quality projects and promotes positive progress in the encryption market. In this way, Binance leads the cryptocurrency market to be more community- and user-focused.
3.2、2021-2022
In 2021 and 2022, Binance’s new currency listing strategy reflects its keen grasp of market hot spots and trends, especially the significant increase in fan tokens. In 2021, Binance launched multiple fan tokens, such as Juventus, Paris Saint-Germain, and Manchester City, showing its emphasis on the sports and entertainment fields. And Binance focuses on supporting projects in the CEFI, DEFI and blockchain gaming fields, such as SafePal, ACM, DEGO and Voxies, further expanding the platform's business scope through these projects.
As the market demand for blockchain applications increases, Binance has launched a number of sports and entertainment-related token projects, such as JUV, PSG, and OG, which have enhanced the platform's user stickiness and activity. In 2022, Binance continued to exert its strength in the GameFi and Metaverse fields, introducing projects such as league of kingdoms, alpine, and STEPN to consolidate its position in emerging markets. At the same time, Binance remained active in the DEFI field and launched a number of high-quality projects, such as GAL and HFT. This series of measures shows Binance's accurate grasp of market trends and its ability to respond to user needs, further enhancing the platform's influence and competitiveness.
3.3、2023
In 2023, Binance's new coin strategy will continue to keep up with market trends and technological innovations, focusing on areas such as AI, education, identity and data privacy. By launching projects such as ARKM, EDU, Open Campus, SPACE ID and ARKHAM, Binance has demonstrated its emphasis on AI technology and educational technology, catering to the market's demand for these emerging fields.
In addition, Binance continues to exert its strength in the GameFi and Metaverse fields, launching projects such as MC, HIGH and ACE, further consolidating its leadership in blockchain games and virtual worlds. The continued attention in the Defi field is also reflected in the launch of projects such as RDNT, MAV and PENDLE, which strengthens the platform's layout in decentralized finance. Overall, in 2023, Binance further enhanced the platform's innovation ability and user stickiness through diversified project selection and accurate market grasp, and continued to lead the development direction of the cryptocurrency market.
3.3、2024
In 2024, Binance’s strategy demonstrates significant progress in diversification and flexibility as Binance continues to lead the market. For example, Binance recently began to list all-circulating meme coins, such as NOT, BOME, etc., which shows that Binance is focusing on protecting the interests of retail investors. These full-circulation projects are more transparent, and retail investors have more opportunities to enter the project in the early stages and enjoy the dividends of project growth.
As shown in Figure 3.3, NOT started to rise rapidly after hitting the bottom, with a price increase of 361.81% from the bottom to now, and exceeded the highest price at the time of listing, with an increase of 108.6% compared to the highest price. Although Bome did not exceed the highest price at the time of listing, the market value and price of both completely follow the market and are not affected by the selling pressure caused by token unlocking.
Source: CoinMarketCap Figure 3.3
4. Future Outlook of Binance
Through this announcement of recruiting small and medium-sized projects to list on Binance, Binance not only demonstrated its sense of responsibility as an industry leader and its determination to promote technological progress, but also provided important support for the development of small and medium-sized projects. In this ever-changing market environment, Binance's strategy not only helps to consolidate its position in the industry, but also provides more protection and opportunities for the majority of retail investors.
In the future, Binance is expected to further promote the development of blockchain technology and the cryptocurrency market by continuously introducing and supporting more innovative projects. At the same time, Binance will continue to strengthen user protection, improve the transparency and security of the platform, and provide a more reliable and efficient trading platform for global users.
V. Conclusion
In general, Binance's announcement of recruiting small and medium-sized projects on Binance has brought new opportunities to the blockchain industry and investors. For the industry, this move will promote technological innovation and market diversification. For investors, although there are certain risks, it also provides potential high-return opportunities. Therefore, investors should make wise investment decisions based on a full understanding of the project background and risks.
Through this announcement, Binance demonstrates its responsibility as an industry leader and its determination to promote technological progress, while also providing important support for the development of small and medium-sized projects. In this ever-changing market environment, Binance's strategy not only helps consolidate its position in the industry, but also provides more protection and opportunities for retail investors.
Disclaimer: Please strictly abide by the laws and regulations of your location. This article does not represent any investment advice.