A common misconception surrounds new coin listings on exchanges like Binance. Let's set the record straight:
The Misconception
People often believe that the percentage gain shown on the exchange is based on individual investors buying at different prices. For example, seeing a 2400% gain for $VANA might lead people to think some investors bought at $1 and others at $25.70.
The Reality
When Binance lists a new coin, they must provide three initial prices:
1. Opening Price: The price at which trading begins.
2. High of the Day: The highest price of the first candle.
3. Low of the Day: The lowest price of the first candle, often based on the ICO or launchpad price.
The Truth Behind the Percentage
The percentage gain shown on the exchange represents the difference between the ICO/launchpad price (Low of the Day) and the current market price. This percentage reflects the returns made by ICO or seed investors.
Key Takeaways
1. Everyone buys at the opening price: There's no way someone bought the coin at the Low or High of the Day when trading started.
2. Don't be misled by percentages: Understand that these numbers represent ICO/seed investor returns, not individual investor gains.
3. Stay educated: Knowing how new coin listings work is crucial for making informed investment decisions.
Stay informed, stay smart!
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