Kelvin Daminabo
Experts at Binance have raised concerns regarding tokens with minimal initial circulating supply, indicating a potential threat to the cryptocurrency market. A recent analysis found that tokens launched in 2024 have the lowest initial circulating supply to fully diluted value (FDV) ratio in several years, suggesting the possibility of increased selling pressure that could adversely impact the market.
The report also notes a significant rise in the total number of tokens issued in 2024 compared to the previous year, with many projects having high FDV due to their low initial circulating supply. This influx raises apprehensions about the market’s capacity to absorb these new tokens effectively.
To address this issue, it is estimated that around $80 billion in financial inputs would be needed to uphold the current token prices, thereby balancing the selling pressure and supporting demand. Investors are advised to be cautious when engaging with tokens of low initial circulating supply and are encouraged to conduct thorough research on the project and its tokenomics before making any investment decisions.
This warning emphasizes the importance of sustainable and responsible token issuance practices for maintaining the long-term stability and health of the market.
Tokens with low supply experience price surge, but watch out for selling pressure
The recent surge in token prices at their inception is predominantly driven by the limited volume of circulating supply during launch. This dynamic can result in an initial price spike due to a constrained supply of circulating tokens, altering market dynamics and increasing selling pressure. A study indicates that tokens worth an estimated $155 billion are projected to become available by 2030, underscoring the importance of monitoring new asset release schedules closely.
As more projects adopt this launch strategy, market participants must understand its potential impact on market dynamics. Being aware of token release schedules and circulating supply can assist in navigating the market effectively. Furthermore, comprehending tokenomics and the fundamental aspects of the project will be crucial for making well-informed investment choices in this rapidly evolving environment.
Meme coins inject community, excitement, and volatility into the market
Meme coins have emerged as a dominant player in the cryptocurrency market, surpassing a market capitalization of over $58 billion. Their popularity stems from a unique structure enabling community-driven growth and hype. Some investors view meme coins as a counterbalance to institutional dominance in larger projects. Analysts highlight that meme coins offer the potential for quick profits with minimal fees, attracting traders seeking swift returns.
Despite market fluctuations, meme coins demonstrate significant growth with many experiencing notable price surges. Their appeal lies in their decentralized and community-centric nature, fostering grassroots expansion and acceptance. As the crypto landscape evolves, meme coins are expected to retain their influence, providing an alternative to conventional investment avenues and fostering community-led innovation.