Over 80% of newly listed cryptocurrencies on Binance, the world's largest digital asset exchange by trading volume, have decreased in value.

In the past six months, these tokens have seen significant declines post-listing, raising concerns for investors looking to invest in new cryptocurrencies.

Majority of New Binance Tokens Are Down

According to a May 17 post by the pseudonymous crypto researcher Flow on X, only five out of the 31 analyzed tokens have increased in value: meme coin (MEME), Ordi token (ORDI), Solana-based Jupiter (JUP), Jito (JTO), and Dogwifhat (WIF). The Ordi token, despite lacking venture capitalist (VC) backing, was the most profitable, with an increase of over 261% since its launch. Dogwifhat followed with a 117% rise.

Flow pointed out that most new Binance listings are backed by top-tier venture capitalists and launch at inflated valuations. The average fully diluted valuation (FDV) on the Binance listing date exceeds $4.2 billion, with some tokens reaching over $11 billion. Often, these projects lack real users or a robust community.

Flow noted that if investors had made equal investments in each of the new Binance listings over the past six months, their portfolio would have declined by over 18%. This suggests that many tokens launching on Binance are not viable investments, as their upside potential is already exhausted. Instead, they serve as exit liquidity for insiders exploiting retail investors’ limited early investment access.

Flow also echoed economist Alex Kruger’s earlier comments, criticizing the market dynamics where many tokens are designed to pump and then dump due to short vesting schedules, fake metrics, and hype over user acquisition.

New Token Launches Are Hurting the Market

Flow argues that the current token launch strategy is harmful to the crypto market, advocating for a new approach. Launching tokens at high, fully diluted valuations (FDVs) leads to value erosion and minimal market interest, causing token prices to plummet. This approach not only damages the token but also discredits the entire crypto industry.

He referenced an earlier post by Crypto_McKenna, who criticized the practice of pushing protocols to launch at high FDVs for the benefit of pre-seed and seed investors. McKenna noted that launching at a lower FDV allows secondary market traders to profit from repricing, helping to generate momentum and interest.