News
Over 80% of newly listed crypto assets on Binance have lost value: data
More than 80% of newly listed cryptocurrencies on Binance, the world’s largest digital asset exchange by trading volume, have lost value.
Over the past six months, these tokens have plummeted in value since going public, raising concerns for investors seeking the latest cryptocurrencies.
Most new listings of Binance tokens trading in the red
According to a May 17 post by cryptocurrency researcher Flow on ) and Dogwifhat (WIF).
Despite the lack of support from venture capitalists (VCs), the Ordi token has been a standout profitable, up more than 261% since its launch. THE controversial Meme coin Dogwifhat followed in second place, up more than 117%.
Flow noted that high-level venture capitalists back most of Binance’s new listings and launch at inflated valuations. Binance’s average fully diluted valuation (FDV) as of the listing date exceeds $4.2 billion, with some tokens exceeding $11 billion. These projects often lack real users or a strong community.
According to Flow, if investors had made equal investments in each of Binance’s new listings over the past six months, their portfolio would have declined by more than 18%. This, Flow adds, suggests that many tokens launched on Binance are not viable investment vehicles, as their upside potential is already exhausted. Instead, it is exit liquidity for insiders taking advantage of retail investors’ limited access to early investment opportunities.
Flow also criticized the current market dynamics, citing economist Alex Kruger’s previous remarks on X. Kruger noticed that many tokens are designed to be pumped and then dumped due to short maturation schedules, fake metrics, and a focus on hype rather than user acquisition.
The launch of new tokens causes damage to the market
According to cryptocurrency researcher Flow, the current meta of token launches is harmful for the cryptocurrency market and a new approach it is necessary to launch the tokens. Releasing tokens at high, fully diluted (FDV) valuations leads to value erosion and minimal market interest, ultimately causing the token to collapse. He added that this approach not only damages the token, but also discredits the entire cryptocurrency industry.
He highlighted a precedent send by Crypto_McKenna, who criticized the practice of pushing high FDV launch protocols to benefit pre-seed and seed investors. McKenna noted that launching at a lower FDV allows secondary market traders to profit from repricing and helps generate momentum and interest.