As a seasoned crypto investor, I’ve seen my fair share of market trends come and go. The recent trend of low float and high fully diluted valuations (FDV) among crypto projects has left me feeling uneasy. It seems that some projects are launching with artificially inflated prices due to limited circulating supplies, only for the value to plummet once the tokens are unlocked and hit the market.
Binance, the cryptocurrency exchange, is encouraging smaller and medium-sized projects in the crypto industry to find solutions for the issue of low circulating supply and high total value (Fully Diluted Valuation, or FDV) that currently prevails.
As a researcher studying the cryptocurrency market, I came across an exciting announcement from Binance on May 20th. They extended an invitation to small and medium-sized projects with sustainable business models to apply for their listing programs. Binance expressed their commitment to supporting these projects, believing that this action will significantly contribute to the growth and enhancement of the crypto ecosystem.
“We hope to enhance the development of the blockchain ecosystem through our support of small and medium-sized projects with strong fundamentals, an organic community base, a sustainable business model, and a dedicated team acting as responsible industry participants.”
As a crypto investor, I’ve noticed a pattern emerging where new projects are entering the market with substantial market capitalizations, leaving many tokens under-valued and undiscovered. In response to this trend, I believe some investors may be making strategic moves to acquire these overlooked tokens in the hopes of potential future growth.
As a token project analyst, I’ve observed a growing trend among new projects. On May 17, Binance Research brought my attention to this development: launches with smaller circulating supplies are increasingly popular. A significant chunk of these tokens’ total supply is set aside for future distributions.
In bullish market conditions, these tokens tend to see swift price increases as depicted in the report. This price surge can be linked back to the scarcity of liquidity during their initial release.
“It’s clear that such rapid price increases won’t last once a large amount of tokens are released into the market following an unlocking event,” Binance stated.
As a crypto analyst, I’ve come across an intriguing observation made by the pseudonymous researcher Flow on May 17. In the past six months, approximately 80% of the tokens that were listed on Binance have experienced price declines since their initial launches.
Newly introduced tokens, according to Flow’s observation, often act as a means for insiders to cash out their profits by providing “liquidity exit points” that are inaccessible to the general public due to the meager initial supply circulating in the market.
Approximately $3 billion in cryptocurrency tokens that had been locked in, were set to be released in May 2024. Notable projects like Sui and Pyth Network are predicted to make public over $1 billion in crypto assets previously assigned to various token holders, including early investors.
As a researcher examining token unlock schedules and market data from reliable sources like CoinMarketCap and Binance, I’ve calculated an estimation of approximately $155 billion in tokens set to be released between the years 2024 and 2030.
The observation made was that the planned release of a large number of tokens could result in substantial selling in the market, yet without a proportional surge in demand or financial inflows to absorb it.
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2024-05-20 15:46