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Binance Experts Reveal the Threat Posed by Low-Supply Tokens
Tokens with a low initial circulating supply will completely dilute value ratios and threaten the cryptocurrency market.
Binance experts have published a new report analyzing tokens launched in 2024. The study shows that the ratio of initial circulating supply to fully diluted value (FDV) was the lowest in recent years, indicating potentially high selling pressure that could have a negative impact on the cryptocurrency market.
Source: Binance
At the same time, the total number of tokens issued since the beginning of 2024 is already close to the 2023 figure, with Binance analysts suggesting that the number of projects with high FDV, dictated by low initial circulating supply, is steadily growing .
With a capitalization/FDV ratio of 12.3%, approximately $80 billion in financial injections will be needed to support the current prices of these tokens. Experts noted that this will support demand and balance pressure from sellers.
The limited circulating supply determines the first price increases
The main reason for this trend is the low volume of circulating supply at the time of the token launch. With the same volume of demand, a reduced share of the circulating supply stimulates the increase in prices in the launch phase of the project.
Source: Binance
The launch of such projects has changed the dynamics of the market, increasing sales pressure. According to the report, $155 billion worth of tokens will be unlocked by 2030. In light of this, it is extremely important to consider and monitor the timing of the release of new volumes of assets onto the market.
The role of meme coins in the market
Experts conclude that the structure is partly responsible for the new wave of demand meme coins. Furthermore, they noted that some investors see this asset class as a way to counter large projects launched with the participation of institutional investors.
Meme coins have become a major part of the landscape in the cryptocurrency world. Analysts at Franklin Templeton I believe this type of asset has gained popularity due to the desire of some traders to make quick profits with low commissions.
The enthusiasm for meme coins does not wane. These tokens are still visible significant growth despite the general dynamics of the cryptocurrency market, with the meme market capitalization in excess of 58 billion dollars.