A recent study by cryptocurrency researcher Flow analyzed the performance of 31 tokens listed on Binance over the past six months. The results are quite surprising and reveal that more than 80% of these tokens have lost value since their listing.
Only five tokens showed price increases compared to when they were listed: ORDI with a staggering increase of 261.9, JTO and JUP continuing the Solana momentum with increases of 62% and 58% respectively, and WIF, a memecoin with an increase of 117%. The other remaining token is MEME, another memecoin.
On the other hand, the biggest decreases were in NFP (-62%), PORTAL (-69%), AEVO (-68%), SAGA (-63%), DYM (-55%), AXL (-55%), BOME ( -55%) and W (-58%).
When Binance listed these tokens, their average fully diluted market cap (FDV) was $4.2 billion, with some even reaching a staggering FDV of over $11 billion. Many of these new listings were tokens backed by top venture capitalists and launched at exorbitant valuations.
However, it is worth noting that most of these projects often lack real users or a strong community behind them. If an investor had a portfolio where they invested an equal amount into each new Binance listing, they would have experienced a decline of over 18% in the last six months.
This study highlights a worrying trend in the crypto market. Most of the time, tokens launched on Binance are no longer considered investment vehicles, having already been stripped of all their upside potential. Rather, they represent exit liquidity for insiders who take advantage of retail investors' lack of access to quality early investment opportunities.
*This is not investment advice.
