Research Summary
The report analyzes the performance of newly listed projects in 2024 on the big four exchanges, highlighting the influence of institutional assets and ETFs, high fully diluted valuations (FDV) and low liquidity of new projects, and the divide between VC and retail investors. It also discusses the different listing strategies of the major exchanges and the impact of these strategies on the performance of new projects.
Key Takeaways
Institutional Influence and ETF Impact
- ETFs and Institutional Assets Drive Bullish Sentiment: The report notes that the current bullish sentiment in the cryptocurrency market is largely driven by ETFs and institutional assets. Over 70 spot Bitcoin ETFs globally have attracted over $28 billion in additional inflows since their approval in January 2024.
- Bitcoin Benefits from Institutional Attention: The institutional attention has led to a new all-time high price of Bitcoin at $73,750 on March 14th. However, the broader altcoin market has not seen similar benefits.
Challenges for New Projects
- High FDV and Low Liquidity: New projects face challenges such as high fully diluted valuations (FDV), low circulating supply, and limited liquidity. This combination has increased retail investor cynicism and perception of overvaluation, making it difficult for these projects to gain organic investor confidence and maintain price stability.
The VC vs Retail Divide
- Shift in Retail Investor Attention: Retail investors have shifted their attention and funds towards the meme coin super cycle, where projects are launched at low valuations. This has impacted the performance of newly listed tokens on the four major exchanges.
Different Listing Strategies of Major Exchanges
- Varying Performance of New Projects: The different listing strategies of the major exchanges may have contributed to the varying performance of new projects. Bitget and Bybit have listed the most tokens this year, focusing on meme coins, while Binance has taken a more cautious approach, listing only projects after thorough due diligence.
Market Downturn
- Widespread Market Downturn: The report highlights the widespread nature of the current market downturn, affecting even the most established players in the space. The second half of 2024 is expected to bring fresh impetus to crypto markets thanks to drivers like the post-halving supply shock, the first expected Fed rate cuts since 2021, and a contentious US presidential election.
Actionable Insights
- Understanding Market Trends: Investors should understand the current market trends, including the influence of institutional assets and ETFs, and the challenges faced by new projects. This can help them make informed decisions about their investments.
- Considering Different Listing Strategies: Investors should consider the different listing strategies of the major exchanges when choosing where to invest. This can help them identify potential opportunities and risks.
- Monitoring Market Conditions: Investors should monitor market conditions and be aware of potential drivers that could impact the crypto markets, such as the post-halving supply shock, Fed rate cuts, and the US presidential election.
