I’ve been following recent trends in token issuance on centralized exchanges (particularly Binance) lately and have found a lot to dig into. The data paints a pretty grim picture and it’s time to face some hard facts.

New coins generally plummeted

Binance Coin underperformed: In 2024, 29 of the 30 new tokens listed on Binance saw significant price drops.

Even tokens backed by Binance Labs such as $AI, $MANTA, $AXL, $ENA, $REZ, $BB, and $LISTA plunged between 44% and 90%.

VC-backed tokens are also struggling: Tokens backed by major VC firms such as a16z, Paradigm, Coinbase Ventures, Galaxy, and Pantera Capital have not been immune.

Starknet, backed by Paradigm and Coinbase Ventures, plunged 81%.

These losses weren’t just minor corrections; they were huge, portfolio-destroying losses. So, what caused it?

Potential factors

Overvaluation: Many projects are overvalued when they enter the market, and the market adjusts to reality, often very brutally.

Hype vs. Substance: The crypto space is still plagued by projects that promise big things but lack real utility or adoption.

Market Saturation: With so many new tokens being launched all the time, it’s becoming increasingly difficult for any single project to stand out or maintain value.

Lack of due diligence: Do exchanges and VCs truly vet these projects thoroughly, or are they just chasing the next potential moonshot?

Short-term trading mentality: The initial excitement surrounding CEX listings may have attracted more short-term traders rather than long-term investors, leading to rapid selling.

The venture capital paradox

What’s particularly worrisome is the poor performance of venture-backed projects. These projects are supposed to be vetted by the best of the best. So why do they perform just as badly (or worse) than other projects?

This raises serious questions about the role of venture capital in crypto:

Does venture capital actually add value, or does it simply inflate valuations?

Is there a gap between what venture capital firms value and the broader market demand?

Are venture capitalists exacerbating the problem by selling tokens as soon as they hit exchanges?

Are you used to speculating on new things instead of old ones?

I think the exchange listing frenzy is largely over. The days of simply being listed on a major CEX guaranteeing a surge seem to be over. This is not necessarily a bad thing. It can lead to:

A more realistic valuation

Greater focus on fundamentals and real adoption

Exchanges and investors do better due diligence

Market maturity

Next Steps

Require more transparency from projects, venture capital, and exchanges

Focus on actual utility and adoption, not hype

Be more critical and analytical in investment decisions

Encourage regulatory transparency to remove bad actors

When looking for a copycat later, you can observe more from these aspects

1. TVL is strong relative to price and can generate revenue;

2. The currency that has rebounded the most after the August 5 crash;

3. There is money in the vault to get through the bear market;

4. Have strong community support;

5. Product, market fit and user volume.

End of the article

This trend is both worrying and surprisingly reassuring. Worryingly, it shows that there is still a lot of speculation and irrationality in the cryptocurrency market. But it is also reassuring because it seems to be a necessary correction. The market is starting to pay more attention to actual value rather than just buying narratives.

For those of us who truly believe in the long-term potential of blockchain and cryptocurrency, this is an opportunity to refocus on creating real value. We need to filter out the good stuff and create a more sustainable ecosystem.

Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together.