Binance-listed tokens used to drive long-term bullish rallies for several tokens in 2017 and even in 2021. However, things have changed drastically after the composition of early investors shifted towards venture capitalists and various funds. that use retail investors as an exit. liquidity.
Binance-listed tokens used to drive long-term bullish rallies for several tokens in 2017 and even in 2021. However, things have changed drastically after the composition of early investors shifted towards venture capitalists and various funds. that use retail investors as an exit. liquidity.
Everyone is talking about the VC+CEX cartel, where teams are pressured to launch at the highest possible Fully Diluted Valuation (FDV) on Tier 1 centralized exchanges to provide exit liquidity for VCs and insiders. . The result: new currencies are no longer great investments. But how real is this statement? The numbers suggest yes.
Researcher Flow, known on X as @tradetheflow_, analyzed the performance of 31 tokens listed on Binance over the past six months. Only five tokens have increased in price compared to the time of their listing: ORDI +261.9%, JTO +62%, JUP +58%, WIF +117%. The biggest declines include NFP -62%, PORTAL -69%, AEVO -68%, SAGA -63%, DYM -55%, AXL -55%, BOME -55%, W -58%. The average FDV when Binance listed these tokens was up to $4.2 billion.
Alex DovbnyaMost of Binance’s new listings are Tier 1 VC-backed tokens and launch at inflated valuations. The average FDV on Binance’s listing dates is over $4.2 billion, with some even reaching a staggering $11 billion. Often these projects do not have a real user base or strong community support. If you had a portfolio that invested an equal amount in each new Binance listing, you would have lost over 18% in the last six months.
Most of the time, the tokens that are launched on Binance no longer serve as solid investment vehicles: their upside potential is already exhausted. Rather, they represent exit liquidity for insiders taking advantage of retail investors’ lack of access to quality early investment opportunities.
Launching with high FDVs only results in a loss of token price and zero engagement in the mind, which ultimately leads to token collapse.
