In terms of trading volume, Binance remains the most powerful cryptocurrency exchange, triggering significant price movements with its listings. Many cryptocurrencies have broken all-time records after being listed here. A recently published report draws important conclusions from the listings on the Binance exchange.
Binance Listings Report
The latest study by cryptocurrency researcher Flow focuses on Binance’s listings. A significant portion of these are backed by top-tier venture capital firms and start with high valuations. According to the report, only 5 out of 31 tokens launched on the Binance exchange managed to sustain their price increase.
ORDI, JUP, WIF, JTO, and MEME are ventures that did not receive support from major Venture Capitals and remained strong. Over the past six months, these tokens individually increased by over 50%. Specifically, ORDI rose by approximately 262%, JTO by 62%, and JUP by 58%. WIF and MEME also gained 117% and 8.5%, respectively.
Interestingly, cryptocurrencies supported by venture capital firms performed poorly. Binance Labs’ NFP token, Pantera Capital-backed OMNI, and tokens from promising projects like Coinbase, Paradigm, and Dragonfly experienced significant value losses.
“If you had a portfolio investing an equal amount in each new Binance listing, you would have experienced a decline of over 18% in the last 6 months.”
Be Cautious with New Altcoins
The common feature of poorly performing tokens is their high fully diluted valuations (FDVs) alongside VC support. Some newly listed altcoins can see valuations up to $11 billion without strong community support. This can cause hasty investors to experience prolonged losses.
Research by Ren & Heinrich last year stated the opposite of today’s report. According to the report at that time, an average gain of 73% could be achieved within the first 30 days after listing. However, Flow researchers now say the perspective has changed;
“Most of the time, tokens launched on the Binance exchange are no longer investment vehicles. All their upward potential has already been taken. Instead, they represent exit liquidity for insiders taking advantage of individual investors’ lack of access to quality early investment opportunities.”
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