A crypto and macro researcher identified as “Flow” on X (formerly Twitter) has provided a detailed review of the profitability of new altcoins listed on Centralized Exchanges (CEX) such as Binance. The researcher disclosed that prominent exchanges like Binance have experienced a significant decline in the value and performance of new tokens listed on their platform. 

80% New Listed Altcoins On Binance Are Down

Reports from Flow suggest that new tokens listed on CEXs’ are not as profitable as they once were. Highlighting all the listed tokens on Binance from the past six months, the crypto researcher noted that 80% of these new altcoins have declined massively, with their value falling below their initial listing price. 

Most of these tokens were listed on Binance from November 2023 to May 2024. New tokens like BLUR, which was integrated on November 24, 2023, plummeted considerably, recording a 45.6% decrease in performance. 

Altcoins
Source: X

On the other hand, excluding two altcoins, all tokens listed from the beginning of 2024 have declined. The most significant drop was recorded by a token called PORTAL, which decreased 69.2% from its listing date on February 20, 2024. 

Only four cryptocurrencies recorded significant gains from the 32 newly listed tokens on Binance. Meme coins like Ordinals (ORDI) and Dogwifhat (WIF) experienced the largest gains, 261.9%,i and 117.69%, respectively. At the same time, others like Jito (JTO) and Jupiter (JUP) saw gains above 50%. 

Flow has disclosed that if investors had diversified their portfolios by investing equal amounts in each of Binance’s newly listed tokens, they would have suffered a significant 18% decline over the past six months. 

The macro researcher noted that when tokens launch at an elevated Fully Diluted Valuation (FDV), they tend to depreciate, ultimately underperforming. He disclosed that most of the tokens listed on Binance are backed by Tier1 VC and launched at extremely high prices, resulting in substantial profit taking and a significant decline. 

New Tokens Have No Real Users

According to Flow, new altcoins launching on Binance are no longer profitable investment vehicles, as their high FDV at launch removes most of their upside potential. He indicated that these newly listed altcoins currently serve as exit liquidity for insiders, who exploit retail investors‘ limited access to quality investment opportunities.

Additionally, the crypto researcher disclosed that newly listed crypto projects on Binance have no real users or a strong community backing them. Their tendency to launch at high FDV also leads to unsustainable growth, which discredits the broader crypto industry. 

Flow asserted that investing in newly listed tokens was a rigged game, highlighting a comment made by economist Alex Kruger, who stated:

Most tokens launching these days are engineered to pump and inevitably dump. This happens because founders set very short vesting schedules, fake metrics, and focus on hype rather than on user acquisition.

Kruger also revealed that automated trading bots and market makers disadvantage ordinary investors by buying large amounts of tokens at launch prices and selling them at significantly higher prices. 

Altcoins total market cap from Tradingview.com (Crypto)
Altcoin market struggles with bears | Source: Crypto total market cap excluding BTC from Tradingview.com

Chart from Tradingview.com

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