A detailed analysis by a crypto and macro researcher known as “Flow” on X delves into the profitability of new altcoins listed on Centralized Exchanges (CEX), such as Binance. Flow’s insights reveal a notable decline in the value and performance of new tokens listed on major exchanges like Binance.
Declining Performance of New Altcoins Listed on Binance
Flow’s findings indicate that newly listed tokens on CEXs are not yielding the profits they once did. Examining all the tokens listed on Binance over the past six months, the researcher highlighted that a significant 80% of these new altcoins have experienced substantial declines, falling below their initial listing prices.
Most of these tokens, added to Binance between November 2023 and May 2024, saw significant drops in value. For example, BLUR, integrated on November 24, 2023, plummeted by 45.6% in performance.
Excluding two altcoins, all tokens listed from the beginning of 2024 have declined. The most significant decrease was observed in a token named PORTAL, which dropped by 69.2% from its listing on February 20, 2024.
Out of the 32 newly listed tokens on Binance, only four cryptocurrencies showed notable gains. Meme coins like Ordinals (ORDI) and Dogwifhat (WIF) saw significant increases of 261.9% and 117.69%, respectively, while others like Jito (JTO) and Jupiter (JUP) recorded gains exceeding 50%.
If investors had evenly distributed their investments across all newly listed tokens on Binance, they would have faced an 18% decline over the past six months, as disclosed by Flow.
Lack of Real Users in New Tokens
Flow asserts that new altcoins introduced on Binance are no longer lucrative investments due to their high Fully Diluted Valuation (FDV) at launch, limiting their growth potential. These new tokens primarily serve as an exit strategy for insiders and fail to attract real users or a robust community, discrediting the broader crypto industry.
The researcher points out that investing in newly listed tokens is skewed, citing economist Alex Kruger’s observation that most tokens are designed for a quick pump and dump cycle due to founders’ strategies, artificial metrics, and emphasis on hype over user engagement.
Kruger also highlights how automated trading bots and market makers disadvantage regular investors by manipulating token prices for profit.
