In a striking evaluation of the 2023 crypto market, a report from Animoca Research has shed light on the overwhelming struggles of tokens launched on major cryptocurrency exchanges since the start of the year. Analyzing a total of 773 token listings from five key players in the space—Binance, Bitget, Bybit, KuCoin, and OKX—the findings pointed to alarmingly negative performance metrics. The report indicated that tokens listed between January and September experienced median performance setbacks ranging between 40% to as much as 70%. This stark revelation highlights the fate of investors engaging with new tokens in what is supposed to be a thriving digital asset environment.
The report illustrates differing levels of tokenize enthusiasm among exchanges during the analysis period. Binance emerged as the most conservative player, with only 44 new token listings. OKX mirrored this cautiousness, recording 47 listings. Conversely, both Bybit and KuCoin displayed a heavier appetite for new tokens, with 155 and 188 listings, respectively. Bitget, however, was the most aggressive, rolling out 339 listings. Ironically, even though Bitget’s extensive list could be viewed as a risky endeavor, they didn’t lead the pack in performance failure.
Despite Bitget’s ambitious release strategy, tokens listed on their platform saw an average return of negative 46.5%, while the median return fared worse at negative 65.9%. In the other corner, Bybit’s new assets suffered the most significant losses, with negative metrics of 50.2% for average returns and a staggering 70.4% for median returns. This downward spiral raises critical concerns about the fundamentals driving the listings during this tumultuous market cycle.
Resilience Among Established Players
While new listings largely wallowed in underperformance, tokens launched on OKX proved to be the most resilient. With their average price return recorded at negative 27.3% and median losses at negative 40.6%, they stood out among their peers. Binance’s average performance was slightly better than OKX’s, with a drop of 27% in the analysis period, but their median results mirrored a troubling 50% decline.
Interestingly, OKX also yielded the highest ratio of profitable listings. They managed to produce positive returns for 27.6% of their tokens, although the gains were modest compared to Binance’s standout seven listings, which achieved an average profit of an impressive 108.4%.
A deeper dive into the data reveals that the market capitalization to fully diluted valuation ratio (MC/FDV ratio) is significantly correlated with performance post-listing. Tokens with a more favorable MC/FDV ratio tended to register better valuations once introduced to centralized exchanges. Notably, tokens falling within the 0.4 to 0.6 MC/FDV spectrum on Binance proved to be high performers in terms of average returns, underscoring the importance of initial market cap positioning in determining long-term success.
Concluding Remarks
Overall, the report raises critical questions about the sustainability of new token listings and investor confidence in the crypto landscape. With an evident trend of diminishing returns across various exchanges, stakeholders must navigate the complexities of token launch strategies, market conditions, and valuation metrics to foster a healthier market moving forward. In a market that once thrived on novelty and explosive growth, the emergence of such negative performance data could certainly reshape investor strategies as they reassess the risks associated with new token offerings.
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