Cryptanalyst Flow Uncovers Troubling Trends in Recent Token Listings on Binance
Cryptanalyst under the nickname Flow has discovered that over 80% of new tokens listed on the largest centralized cryptocurrency exchange Binance in the past six months have seen a decrease in price since the start of trading. Out of 31 new coins, only five assets have shown positive performance: MEME, ORDI, JUP, JTO, and WIF.
According to Flow, if investors had evenly distributed funds on each new listing on Binance, the value of such a portfolio would have decreased by 18% over six months. The analyst claims that most new tokens on the exchange are no longer promising investment instruments, but rather serve as an exit liquidity for insiders who profit from the lack of retail investor access to early investment opportunities.
The situation is related to the merging of venture capital and centralized exchanges. Tokens are launched on exchanges with inflated valuations — Fully Diluted Value (FDV), which can reach 4.2 billion dollars and even exceed 11 billion at some projects. This valuation is calculated by multiplying the token price by the total supply, showing the projected value of the project at full token release.
Flow points out that many of these projects are backed by leading venture companies, but often they lack real users and a strong community. He believes that high FDV and inflated valuations create an unstable market, discrediting the crypto industry. Retail traders are starting to realize that such token launches often do not meet expectations and only serve for the benefit of insiders.
If the situation does not change towards more equal investment opportunities, this could have long-term negative consequences for the entire industry, warns Flow.
