Are those who chase new coins listed on the Binance exchange making money?

A couple of days ago, a friend left me a message asking: How can one buy tokens that will be listed on Binance in advance?

This is a great question because many people know that if a token can be listed on a mainstream exchange (like Binance, OKX, Coinbase, etc.), it will directly serve as a catalyst for the token's price increase. However, the problem is that such insider information may only be accessible to a very small number of insiders or corresponding interest groups within the exchanges. If I could accurately know which token will be listed on Binance next, I would definitely rush to buy it myself, as such tokens are likely to yield considerable profits on their first day of official listing.

Although I can't answer this question that almost everyone wants to know, since we mentioned this matter, let's discuss it from a few other angles.

1. Does listing on Binance guarantee a price increase?

From most people's intuitive feelings or historical data, as long as a token can be listed on Binance, it is basically a sure thing. For MemeCoins, it is even more like a carp leaping over the dragon gate, inevitably leading to a surge, because being listed on Binance means an increase in liquidity (thanks to Binance's large user base), enhanced trust and visibility, and dedicated teams or market makers to promote or incubate it.

However, this does not mean that tokens listed on Binance will always maintain an upward trend. In different historical periods, we may find some differences, for example:

During the last bull market, from September 2020 to November 2021, the main narrative in the crypto market was DeFi and various high APR projects. During that bull market, the most intuitive feeling was that you didn't need to understand too much about the project's fundamentals and tokenomics; as long as a project had the opportunity to be listed on Binance, you could just buy blindly and make money.

But since the start of this bull market cycle, the main narrative has changed significantly, especially around March 2023, when the ARB airdrop ignited the market, and various narratives began to enter a relatively early explosive stage, such as Layer2, airdrops, AI, Memes, BRC20, and other hot concepts began to attract more and more attention and discussion.

Not long after, around May 2023, RDNT started, and Binance Launchpool re-entered people's sight, attracting some participation (the previous Launchpool was in 2022). From that time, in a certain sense, it seemed to herald the imminent start of this bull market, although not many people noticed it at the time.

However, as time went on, Binance's increasingly frequent listing speed seemed to gradually cause dissatisfaction among more people, until around May and June of this year, when many openly complained that Binance's frequent new listings were just harvesting retail investors. I remember at that time He Yi (Binance co-founder) wrote a long article to respond to this matter. As shown in the image below.

Of course, we can't blame everyone for complaining, because the actual performance of some new coins after being listed on Binance has indeed disappointed many. For example, the CATI that many people bought started to decline in price from the second day of its listing. As shown in the image below.

This may lead some people, especially those who have experienced the previous two bull markets, to feel very unhappy. They seem to have been trapped from the beginning because, in their historical experience, tokens listed on Binance should not exhibit such performance during a bull market.

In fact, the issues mentioned above may be caused by various reasons. Each bull market has similarities, but there will definitely be differences, and we cannot completely copy historical experiences. Especially this year (2024), with the successive approval of BTC and ETH ETFs, the development logic of the crypto market has already undergone significant changes. In previous bull markets, as long as a token could be listed on Binance, buying it during the bull market would generally yield profits, but as this bull market has developed to the present, we should no longer view this matter so absolutely. We may need to sort and view this matter separately:

First, for projects with TGE on Binance.

TGE, or Token Generation Event, refers to the event of token generation, which can be understood as projects that are launched on Binance, such as DOGS, CATI, HMSTR, etc. Whether such projects can perform well and sustainably after being listed on Binance is one aspect, but more importantly, we need to look at the project's narrative ability and the timing of the listing (market timing). If both the narrative ability and timing are quite perfect, then the token will definitely continue to have buyers after being listed on Binance.

Secondly, for projects that have already had TGE before being listed on Binance.

For example, well-known tokens like PEPE, WIF, TON, RON, etc., actually had their TGE before being listed on Binance. This means that these projects had already gone through a period of accumulation and development before being listed on Binance, and some projects have established a relatively complete product and community foundation. Such tokens inherently have a certain grassroots support (liquidity and trading volume). The continuation of these projects being listed on Binance can be seen as a win-win choice for both the project parties and Binance.

Therefore, for those who are still very keen on chasing potential projects that may be listed on Binance, our suggestion is that you may need to slightly change your mindset. It’s not that any token that has the potential to be listed on Binance will definitely make you money; you may also need to make some distinctions and conduct a comprehensive evaluation based on the corresponding project's narrative ability and the current market timing (considering factors like Bitcoin's movement, macroeconomic environment, etc.).

2. I heard Binance charges listing fees?

I'm not sure about this specifically, as I have not participated in Binance listings myself. What I say below is all rumors or hearsay, so just take a look:

• The SCR (Scroll) that was recently listed on Binance (October 22) reportedly had the project party pay a listing fee of $100 million to jump the queue.

• For projects listed on Binance, it is said that the project party needs to hold and stake $5 million worth of BNB, plus pay 8% of the total token supply as a fee.

In short, there are basically two types of tokens that want to be listed on Binance: one requires the project party to invest a large amount of money to list on Binance, most of which are tokens with high FDV, and ordinary retail investors are likely just buying in. The other type is tokens that already have a good foundation, and Binance also needs to capture that traffic.

Of course, some people believe that projects backed by Binance/Coinbase/Paradigm/A16Z (i.e., projects with Binance investment background or financial strength) are the most likely to be listed on Binance. This can also be considered a direction for selection, and interested friends can research and position themselves accordingly. As shown in the image below.

3. What is the overall performance of tokens listed on Binance?

Among all the tokens listed on Binance since 2024, if you bought them directly at the time of listing, all but 6 tokens are currently in a state of loss. The token with the highest increase is NEIRO, which has risen 379% since its listing on September 16. Additionally, more than half of the tokens have dropped at least 30-80%, with the token that has dropped the most being AEVO, which has fallen 88% since its listing on March 13. As shown in the image below (table data is as of the time of writing this article).

In summary, the price increase or decrease of any project (token) is determined by various factors, and being listed on Binance is just one of the catalysts. Although all tokens listed on Binance tend to experience significant surges on their first day, this does not mean that such upward trends can continue. We need to consider the current market timing, the project's fundamentals, and narrative ability simultaneously.

Many people tend to chase new tokens rather than old ones, so they sometimes pursue those with potential or newly listed tokens on exchanges (like Binance). In fact, the saying of chasing new rather than old has been mentioned in our previous articles, but everything needs to be viewed dialectically; otherwise, it is easy to fall from one extreme into another.

Overall, participating in projects that have already been listed on Binance is definitely much better from a risk perspective than various DEX projects that could rug pull at any time. We cannot only accept price increases while being unable to accept declines. If you cannot bear the market's volatility (the price fluctuations of the tokens you purchase), then you should not participate in any trading.

That's all for this issue. More articles can be viewed through the Huahua Li homepage. The above content is just personal opinions and analyses, intended for learning records and communication purposes only, and does not constitute any investment advice.