Binance: Observations and thoughts on the current situation of high-valuation, low-circulation tokens

In recent months, the prevalence of tokens with high valuations and low initial circulation supply has been hotly debated in the cryptocurrency community. There are concerns that this market structure will provide traders with little sustainable upside after the token generation event (TGE).

Data from CoinMarketCap and Token Unlocks confirm that more and more tokens tend to be issued in the form of low circulation supply and high valuations. Notably, it is estimated that approximately $155 billion worth of tokens will be unlocked from 2024 to 2030. If there is no corresponding increase in buyer demand and capital flow, a large number of tokens entering the market will bring selling pressure.

Due to factors such as the influx of private market capital, aggressive valuations and optimistic market sentiment, tokens are often issued at a high fully diluted valuation (FDV).

Given the current market environment, investors must be selective and open-minded, and fully consider the fundamental aspects of the project, such as token economics, valuation and product. Project teams may also need to consider the long-term impact of decisions related to token economics design.

Venture capital firms will continue to play an important role in the cryptocurrency industry and can work with project teams to ensure that supply is distributed fairly and valuations are reasonable. $BTC $ETH $BNB