Altcoin
Is the listing of new Altcoins on exchanges like Binance profitable? This cryptocurrency researcher has the answer
A cryptocurrency and macro researcher identified as “Flow” on X (formerly Twitter) has provided a detailed analysis of the profitability of new altcoins listed on Centralized Exchanges (CEX) like Binance. The researcher revealed that major exchanges such as Binance have seen a significant decline in the value and performance of new tokens listed on their platform.
80% of new altcoins listed on Binance are declining
Relationships from Flow suggest that new tokens listed on CEXs are not as profitable as they once were. Highlighting all tokens listed on Binance Over the past six months, the cryptocurrency researcher has noticed that 80% of these new altcoins have declined massively, with their value dropping below their initial listing price.
Many of these the tokens were listed on Binance from November 2023 to May 2024. New tokens as BLURwhich was integrated on November 24, 2023, has fallen significantly, recording a performance decline of 45.6%.
On the other hand, excluding two altcoins, all tokens listed since the beginning of 2024 are declining. The most significant drop was recorded by a token called PORTALwhich has decreased by 69.2% since the listing date of February 20, 2024.
Only four cryptocurrencies recorded significant gains from the 32 newly listed tokens on Binance. Meme coins like Ordinals (ORDI) AND Dogwifhat (WIF) recorded the largest gains, 261.9% and 117.69%, respectively. At the same time, others like Jito (JTO) and Jupiter (JUP) have posted gains of more than 50%.
Flow revealed that if investors diversified their portfolios by investing equal amounts in each The newly listed Binance tokenswould have suffered a significant decline of 18% in the last six months.
The macro researcher noted that when tokens are launched at a high fully diluted valuation (FDV), they tend to depreciate, ultimately resulting in underperformance. He revealed that most of the tokens listed on Binance are backed by Tier1 VC and launched at extremely high prices, resulting in substantial profit taking and a significant decline.
The new tokens have no real users
According to Flow, new altcoins launched on Binance are no longer profitable investment vehicles, as their high FDV at launch removes much of their upside potential. He indicated that these newly listed altcoins currently serve as exit liquidity for insiders, who exploit retail investorsLimited access to quality investment opportunities.
Furthermore, the cryptocurrency researcher disclosed that the crypto projects just listed on Binance do not have real users or a strong community supporting them. Their tendency to launch with a high FDV also leads to unsustainable growth, which discredits the cryptocurrency industry in general.
Flow said investing in newly listed tokens was a rigged game, highlighting a comment made by economist Alex Kruger, who declared:
Most tokens launched these days are designed to pump and inevitably dump. This happens because founders set very short maturation schedules, false metrics, and focus on hype rather than user acquisition.
Kruger also revealed that automated trading robots and market creators disadvantage ordinary investors by purchasing large quantities of tokens at launch prices and selling them at significantly higher prices.
Chart from Tradingview.com