Examining Recent Cryptocurrency Trends: Insights from Animoca Brands Report
The newest analysis by Animoca Brands Research delves into the dynamics of newly launched cryptocurrencies on exchanges from January to September 2024. This report reveals prominent seasonal trends affecting trading activities within the cryptocurrency market. It focuses exclusively on digital currencies listed on notable exchanges such as Binance, Okx, Bitget, Bybit, and Kucoin. The findings present compelling reflections on the altcoin market, prompting a deeper understanding of current trends.
Animoca Brands Findings: The Struggles of New Tokens on CEX
The recent findings from Animoca Brands indicate that fresh coins launched on centralized exchanges have generally underperformed. From January to September of this year, a total of 773 new cryptocurrencies were introduced on major platforms, including Binance, Bybit, Bitget, Okx, and Kucoin. Among these, Bitget led with 339 listings, trailed by Kucoin at 188 and Bybit at 155, while Binance and Okx exhibited a more cautious approach in their listing strategies.
In 2024, the first quarter proved to be the most advantageous for launching new speculative products, synchronized with the Bitcoin bull market. Notably, 37% of new coin listings occurred within the first three months of the year, with April marking a high point featuring 133 new listings. Nevertheless, the overall performance of these new entries has not been impressive.
The data indicates a troubling average return on investment (ROI) across exchanges, fluctuating between -27% and -50%. While there are exceptional positive cases, some coins have suffered significant drops, losing over half their initial value during this timeframe.
Performance Analysis of New Tokens on Different Exchanges
Breaking down the statistics reveals that on Binance, seven tokens managed to achieve an average growth of 108% during the assessed period, while 37 tokens experienced an average decline of 52.7%. On Bitget, of the 339 introduced tokens, only 40 saw price increases, while 299 faced a decline averaging 66%. Bybit recorded the highest median performance while also having the gravest average negative return at -70%. In a similar vein, Kucoin, known for its gem-hunting reputation, recorded disappointing outcomes for 163 new listings. Interestingly, Okx performed relatively better compared to its rivals, albeit with the lowest price increase average at 39.5%.
Rising Coin Count: Fragmentation’s Impact on Altcoin Value
The Animoca Brands report points to excessive fragmentation within the cryptocurrency landscape as a key factor contributing to the declining fortunes of newly introduced coins. Presently, there are over 2.4 million cryptocurrencies available, leading centralized exchanges to gradually phase out older tokens in favor of newer options. Tokens claiming to be transformative often succumb to speculation and rampant inflation, complicating the choices available to investors.
This overly broad assortment of options makes it increasingly challenging for users to navigate the multitude of investment opportunities available on exchanges. Recently, liquidity has seemed to concentrate on larger-cap assets, while altcoins struggle to gain traction, reflecting a distinct shift in capital flow.
Until 2021, entire classes of tokens tended to move in unison, whereas now, positive performance appears increasingly isolated. A trend has arisen in which liquidity is being inequitably distributed among altcoins, undermining their viability.
Furthermore, many cryptocurrency teams prioritize listing coins characterized by low circulating supply and high fully diluted valuation (FDV) to potentially benefit early investors and insiders. Although this approach previously boosted initial price growth, recent trends suggest that this strategy may no longer yield favorable outcomes.
Analyzing Market Capitalization (MC) and FDV Relationships
The research by Animoca Brands also sheds light on the relationship between market capitalization (MC) and FDV for newly listed tokens. This dynamic helps in discerning sector trends and fluctuations. The analysis shows that on Binance, a significant portion of valuable listings falls within the 0.4-0.6 range, facilitated by tokens such as BANANA, TON, and XAI. Okx displays a concentration of listings in the 0-0.2 and 0.6-0.8 ranges with assets like ZK, JUP, ONDO, ZRO, and STRK coming to the forefront.
In contrast, Bybit, Bitget, and Kucoin show lower FDV compared to Binance and Okx, illustrating varying selection strategies across exchanges. Binance and Okx’s focus has shifted toward established altcoins with higher FDVs, though this often limits the growth potential of newcomers.
It is noteworthy how few listings emerged with an MC/FDV ratio equal to 1, as recently, only memecoins presented this characteristic. Typically, such qualities can enhance the perception of scarcity, making them less susceptible to inflation and supply expansion.
Moreover, the investigation reveals that mid-range valuations of MC/FDV ratios tend to generate the highest values, suggesting that balanced listing approaches may attract user interest, emphasizing cryptocurrencies that have previously demonstrated strength while still offering growth potential.
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