The once-celebrated "Binance effect," where tokens listed on the prominent exchange Binance consistently experienced sustained price surges, is showing signs of diminishing. This shift indicates evolving investor sentiment and a maturing cryptocurrency market.

Recent analyses, including an insightful thread by crypto researcher Flow (@tradetheflow_), highlight a concerning trend among newly listed tokens on Binance. Over the past six months, more than 80% of these tokens have seen their values decline post-listing, challenging the previous norm of consistent price increases following a Binance listing.

A statistical overview of Binance listings over the past six months reveals significant market dynamics. The Fully Diluted Valuation (FDV) for these tokens at the time of listing averaged $4.225 billion, with some reaching up to $11.7 billion. Despite these high initial valuations, the post-listing performance shows an average decline of 18.19%, indicating a disconnect between initial hype and sustainable market performance.

However, some tokens defy this downward trend. Memecoin (MEME) and ORDI, along with Solana-based tokens like Jupiter (JUP) and Dogwifhat (WIF), have managed to maintain or even increase their value post-listing. These exceptions may be due to unique positioning within the crypto ecosystem or the absence of heavy backing from tier 1 venture capitalists, which often leads to inflated initial valuations.

Flow’s examination reveals that tokens backed by top-tier VCs are often launched at inflated valuations without substantial user bases or community support, leading to rapid devaluations. Prominent voices in the crypto community, such as Alex Krüger (@krugermacro) and McKenna (@Crypto_McKenna), criticize current token launch strategies. They argue that high FDVs and low float schemes prevalent among VC-backed protocols undermine asset potential and tarnish the broader industry's reputation.

Additionally, a 2023 Reddit post on r/CryptoCurrency by user Qptimised revisited the "Binance Effect," analyzing the price impact of new cryptocurrency listings on Binance. The study, updated for the economic conditions of 2023, found that prices of newly listed tokens, such as Worldcoin and Arbitrum, initially spiked but generally declined over time.