Newly listed cryptocurrencies or tokens on Binance — the largest exchange on the market — tend to nearly double in price, according to a new study by researcher Ren & Heinrich, who analyzed 26 digital assets listed on the exchange over the past 18 months. The study reveals that several cryptocurrencies listed on Binance appreciated by an average of 41% in the first day after listing. On the third day, however, the coins faced a 17% drop, highlighting the risks of buying coins after listing on the world’s largest exchange. The long-term impact of a new cryptocurrency on Binance turned out to be less optimistic, with the study revealing that the tokens stay above the price they were listed for an average of 22 days before turning completely negative.
High Binance Listed Cryptocurrencies
Two weeks high, then comes the drop
As you can see in the chart, most cryptocurrencies saw a significant price increase shortly after being listed on Binance, however, market conditions ended up impacting the asset’s performance in the following days. According to the study, in most cases, a Binance listing has a positive impact on the price of a cryptocurrency, with the biggest increase usually occurring on the 1st day after listing. The size of this rally and how long the respective currency can maintain this positive trend varies from project to project. For most cryptocurrencies and tokens, the upside is relatively short. After about 2 weeks, almost half of all analyzed cryptocurrencies lost their gains.
Most coins with a negative price performance after 2 weeks were listed in the bear market.
Binance Effect
Being added to Binance is a sign of confidence for a project, but as the data suggests, it takes more than a listing to sustain a cryptocurrency’s value. By opening up new markets, it gives investors more places to sell and buy cryptocurrencies. The Binance Effect is a phenomenon where the price of a cryptocurrency jumps significantly after being listed on an exchange. Binance, launched in 2017, has grown rapidly to become the most popular cryptocurrency exchange in the world. So, after the company started listing new coins, people started to notice something: being listed on Binance would normally lead to a rapid increase in the price of a coin. “The Binance Effect”. Of course, it’s no surprise that being listed on the world’s largest exchange leads to an increase in the price of a coin. This shows that a coin is legit (or has paid the listing fee). It also opens up the coin to a wider range of investors. Throughout history, most coins listed on Binance have experienced a significant increase in price. However, only half managed to keep the price above the listed price in the following days, while the other half fell below the listing price. Based on several studies that analyzed listings on Binance, the average maximum profit potential can be as high as 109%; in other words, those who bought before the announcement and sold at the peak after the listing managed to double their investment. Nearly 80% of listed cryptocurrencies lost value the day after they were listed, so investors get bigger profits if they bought the asset before the Binance listing and sold it the same day it was listed.
