Analysts note that while most new tokens on Binance lack a broad user base, they are often listed at inflated valuations.
More than 80% of newly listed cryptocurrencies on Binance, the world’s largest digital asset trading platform, have fallen in value.
In the last six months, these tokens have seen a significant drop in value since they were listed, which has unnerved investors looking for the latest cryptocurrency.
Most New Binance Tokens Post Losses After Listing
According to a May 17 post on the X platform by pseudonymous crypto researcher Flow, only five of the 31 tokens analyzed saw an increase in value, including Memecoin (MEME), Ordi Token (ORDI), Solana-based Jupiter (JUP), Jito (JTO), and Dogwifhat (WIF).
Currently, there is widespread public discussion about a possible alliance between venture capital and top centralized exchanges, which would incentivize project teams to list their tokens on top exchanges at the highest fully diluted valuations while providing exit opportunities for venture investors and insiders.
Despite not being backed by venture capital, Ordi Token has been the most profitable since its launch, up more than 261%. Controversial meme coin Dogwifhat is a close second, up more than 117%.
Flow pointed out that most of the new Binance listed projects are backed by top venture capitals and listed at inflated valuations. The average fully diluted valuation (FDV) on Binance's listing day is over $4.2 billion, and some tokens are even valued at over $11 billion. These projects usually lack a real user base or strong community support.
Flow said that if investors had invested the same amount in every newly listed project on Binance in the past six months, their portfolio would have fallen by more than 18%. This shows that many tokens launched on Binance are not effective investment vehicles because their appreciation potential has been exhausted. Instead, they provide exit opportunities for insiders who take advantage of the limited early investment opportunities for retail investors.
Flow also criticized current market dynamics, citing economist Alex Kruger’s early views on the X platform. Kruger noted that many tokens are designed to be manipulated and dumped with short vesting periods, false metrics, and excessive hype rather than user acquisition.
New Token Listings Hurt the Market
Flow believes that the current model of token listings is hurting the crypto market and that a new approach to token listings is needed. Launching tokens at high fully diluted valuations (FDVs) leads to erosion of value and reduced market interest, ultimately causing a collapse in the value of the token. He added that this practice not only harms the token itself, but also the reputation of the entire crypto industry.
He referenced an earlier post by Crypto_McKenna, who criticized the practice of pushing protocols to list at high FDVs to benefit early seed and pre-seed investors. McKenna noted that listing at a lower FDV allows secondary market traders to profit from repricing and helps create momentum and interest.
Conclusion:
As the cryptocurrency market continues to grow and evolve, Binance’s listing strategy for new tokens and its impact on investors and the industry as a whole deserves deep thought. As Flow and Crypto_McKenna pointed out, the current high-valuation listing model may damage the long-term value of tokens and the trust of the market.
Therefore, it is necessary to explore a more sustainable and responsible approach to token listings that protects the interests of investors while promoting the healthy development of the cryptocurrency industry. By encouraging transparency, user participation, and fair valuations, we can look forward to a more mature and stable cryptocurrency market that will bring long-term benefits to all participants. #Binance #加密资产 #新上市代币估值
