Most Recent Binance Listings Struggle

A significant majority of newly listed cryptocurrencies on Binance, the world’s largest cryptocurrency exchange by trading volume, have seen a decline in their values. Data indicates that over 80% of the tokens listed in the past six months have experienced a drop since their debut. This trend serves as a cautionary signal for investors enticed by new cryptocurrency offerings. Among the 31 tokens analyzed, only five have shown appreciation in value. These include the memecoin (MEME), Ordi token (ORDI), Solana-based Jupiter (JUP), Jito (JTO), and Dogwifhat (WIF), according to a post by a pseudonymous crypto researcher named Flow on May 17.

For investors, this high percentage of depreciating newly launched tokens signals a tough market landscape. Anndy Lian, a blockchain expert and author, referred to the current cryptocurrency market as relatively stagnant. He pointed out that while some altcoins are still generating interest, the market overall lacks significant momentum. Lian also mentioned that the tokens listed on Binance might take longer to realize growth, in contrast to the rapid appreciation observed during previous bull markets.

Despite being introduced with an average fully diluted valuation (FDV) exceeding $4.2 billion, these new tokens often lack a genuine user base. This substantial initial valuation could hinder their potential for value growth. The researcher Flow suggested that many of these tokens are no longer viable investment vehicles because their maximum growth opportunities have already been exhausted. Instead, they now serve as exit liquidity for insiders who capitalize on the lack of access retail investors have to early, quality investment opportunities.

Retail investors have shown a strong interest in memecoins, a trend evident despite the lack of venture capitalist (VC) backing for some of these tokens. Notably, the Ordi token has soared over 261% since its launch, marking it as the most profitable of the newly listed tokens. The memecoin Dogwifhat has increased in value by over 117%. According to Lian, the independent operation of memecoins from the broader altcoin market segment is a key factor driving their growth.

Lian noted that many retail investors tend to hold these memecoins for the long term, contributing to their swarming interest in tokens like $MEME and $WIF. Evidence of the memecoin craze can also be seen in the trading volumes; six of the top trading coins are currently memecoins. The excitement surrounding memecoins reached new heights when the token Pepe set a record with its value climbing above $0.000010 on May 13.

The surge in Pepe’s value came a day after Keith Gill, famously associated with the 2021 GameStop short squeeze, re-emerged on social media. This event appears to have further fueled retail investor enthusiasm. One trader managed to turn $3,000 into a staggering $46 million within a month thanks to Pepe’s meteoric rise, underscoring the immense, albeit risky, potential of investing in these highly speculative assets.

The performance of these memecoins has sparked mixed reactions among investors and experts, with some questioning the sustainability of such rapid appreciation. Critics argue that while the short-term gains are alluring, the long-term viability of memecoins remains uncertain. Lian and other blockchain experts continue to urge caution, advising investors to conduct thorough research before diving into such volatile markets.

While certain memecoins and a few newly listed tokens on Binance have posted impressive gains, the overall landscape for new cryptocurrencies appears fraught with risk. Investor caution is advised, especially given the challenging market conditions and the tendency for many new tokens to decline post-listing. The hype around memecoins highlights retail investors’ appetite for high-risk, high-reward opportunities, a sentiment that seems likely to persist for the foreseeable future.