Crypto Listings: Why Quantity Doesn’t Mean Quality?
In the volatile world of cryptocurrency, understanding the factors that influence the success of newly listed assets is crucial for investors. Analysing the performance of 23 crypto assets listed on major exchanges reveals significant insights.
Today, let’s explore new crypto listings’ trends, benefits, and risks, providing a comprehensive overview of how market conditions and listing contracts can impact asset performance.
Signs of Listing Contracts
To understand the profitability of new assets, it is worth analysing 23 crypto assets from the latest listings within 30 days of trading on exchanges like Bybit, Binance, KuCoin, and OKX. Only four coins showed growth after a month.
This means that the overall success rate of assets in the market within 30 days after the start of trading is around 17%. Still, when considering each exchange individually, the statistics improve to about 30–40% of tokens showing growth.
- The most significant drops after listing occurred on KuCoin: out of 13 reviewed coins, three fell by more than 80% within a month of listing. The others lost between 10% and 40% over the same period. Only four listings showed growth or no decline.
- The most minor drops were seen on Binance, up to 40%. However, the ratio of coins that grew is similar to other exchanges — about 40%. The platform’s key feature is that the decline in tokens after the start of trading does not exceed 50% within the period.
- On Bybit, the maximum drop of new tokens within 30 days after the start of trading was 80%, with five out of 10 listings falling by more than 40% and only four out of 12 showing growth.
- Only three of the 11 reviewed tokens on OKX grew. The maximum value decline was 60%, with the remaining fallen tokens ranging from 20% to 30%.
Impact of Listing Condition Contracts
The limited drop on Binance and OKX may be related to the existence of listing condition contracts. At the end of 2022, former Binance CEO Changpeng Zhao (CZ) disclosed one of these agreements with the Mithril project team. The contract stated that if the token traded below a specific price for 15 days, the exchange had the right to remove the coin from the trading lists.
CZ responded to the Mithril team’s complaints about delisting the MITH token: “I checked after seeing your post. Here is the contract clause for your reference and the community’s. Usually, we maintain confidentiality unless you break it. The security deposit is intended to encourage creators to continue their work.” If such agreements exist, OKX and Binance will likely use them. The exchange and the project probably set a lower price range for the asset, with the possibility of penalties for the latter.
Market Trends and Listing Success Rates
The trend began to noticeably deteriorate around mid-2023, when Bitcoin was priced at approximately $26,000, and the active phase of discussions regarding a digital gold-based ETF in the United States had just begun. The total cryptocurrency market capitalisation increased by 2.5 times just before the subsequent growth.
This leads to an unexpected conclusion: the number of successful listing projects tends to be higher when the cryptocurrency market is stable or declining. Conversely, listings are a less secure investment tool during market upswings.
Starting in August 2023, average performance metrics stabilised and have remained consistent. However, the overall success rate of “winners” from the previous year was 29%, double that of new listings on exchanges such as Bybit, Binance, KuCoin, and OKX, where the combined success rate is around 15%.
Optimal Strategies for New Crypto Listings
While analysing different periods, such as 90 days post-listing, can broaden the statistical perspective, it doesn’t answer the crucial question of what to do after a coin is listed on an exchange. The overall market trend suggested that, at least until mid-July 2024, it was statistically better to sell immediately and avoid buying new listings. The most moderate token declines were observed on Binance and OKX exchanges.
It’s also worth noting that tokens demonstrating positive performance are unique in trading on at least three major exchanges. Starting trading on only one or two exchanges typically hurts the coin’s price. Tokens with positive performance include Notcoin (NOT), LayerZero (ZRO), and Aethir (ATH). However, this doesn’t guarantee overall prospects but indicates a higher probability that the token won’t plummet by 80% or 90% in the first few weeks of listing on major exchanges.
Conclusion
The performance of newly listed crypto assets varies widely across exchanges and market conditions. While some platforms, like Binance and OKX, employ mechanisms to mitigate severe declines, others, such as KuCoin and Bybit, exhibit higher volatility. Ultimately, we should all admit that now isn’t the best time for vast and risky investing.
About Concordex
Concordex is a cutting-edge Decentralised Exchange (DEX) that operates on the Concordium Blockchain. Renowned for emphasising institutional-grade security, transparency, and user-centric design, Concordex offers various services, including staking, swapping, and perpetual trading. With a mission to bridge the divide between traditional finance and decentralised systems, it offers users an unparalleled trading environment.
