The recent report by Animoca Research has brought to light some concerning trends regarding token performance in 2023. Notably, tokens listed on five significant exchanges—Binance, Bitget, Bybit, KuCoin, and OKX—experienced a pronounced decline, with median performances plummeting by as much as 70%. The analysis encompassed a total of 773 token listings made between January and September, underscoring a troubling market environment for new cryptocurrency entrants.
Examining the listing activities of various exchanges reveals stark contrasts in their strategies. Binance, with only 44 listings, took a notably cautious approach. OKX mirrored this strategy, ending the quarter with 47 tokens. On the other end of the spectrum, Bitget aggressively pursued listings, resulting in 339 tokens being added, while Bybit and KuCoin showed more moderate increases with 155 and 188 listings, respectively. The surge in listings in March and April can be attributed to perceived favorable market conditions; however, the subsequent price returns tell a different story, reflecting a broader market deterioration.
Despite Bitget’s ambitious listing approach, its tokens did not register the worst performance, suggesting that quantity does not always equate to quality. Nevertheless, the overall trend was grim, with an average negative return of 46.5% and a median return of 65.9%. Bybit fared the worst among the exchanges, with tokens registering declines of over 50% and a staggering 70.4% in median returns. Comparatively, KuCoin’s tokens showcased a negative median price return of 66.1% while OKX, despite higher losses, exhibited a slight resilience, enduring an average decline of 27.3%.
The report also shed light on profitability ratios among exchanges, where OKX led with 27.6% of its listings yielding positive returns by September. However, the gains were modest, averaging 39.5%. Conversely, Binance’s outperforming listings yielded an average return of 108.4%, alongside a median gain of 53.5%. This dichotomy emphasizes that while some exchanges achieved high returns, overall performance remained dampened, as evidenced by bybit and KuCoin; their listings surpassed the 100% average profit mark despite being surrounded by a sea of negative outcomes.
Furthermore, the report highlighted that tokens with a favorable market cap/fully diluted value (MC/FDV) ratio achieved the highest valuations following their listings on centralized exchanges. Binance’s superior average returns can largely be attributed to its stance towards tokens within the 0.4 to 0.6 MC/FDV ratio range, suggesting that a strategic focus on underlying valuations could play a critical role in performance outcomes.
The findings from Animoca Research reflect a challenging landscape for new tokens on major exchanges during the first three quarters of 2023. While certain exchanges like Binance managed to cultivate pockets of profitability, the overall narrative is marked by significant declines across the board, emphasizing the volatility and unpredictability characteristic of the cryptocurrency market. Investors must remain vigilant, strategizing carefully under these uncertain conditions while monitoring performance metrics and market cap dynamics.
Leave a Reply