The Binance Effect of Altcoins: How Much Can a Listing Boost Prices?

It was determined that cryptocurrencies listed on Binance, the world’s largest cryptocurrency exchange, gained an average of 41%.

A recent analysis by cryptocurrency investor and researcher Ren & Heinrich introduced the concept of the “Binance Effect.” In the analysis, a total of 26 cryptocurrencies were monitored for 18 months, revealing the impact of the Binance listing on projects. The cryptocurrency listed on Binance, which contains 75% of the cryptocurrency market, is said to have gained 41% in the first 24 hours. But on the third day of listing, it rose by about 24%.

On average, altcoins remained positive for 22 days after listing before turning negative again. Binance’s high trading volume is believed to be the main source of this influence. Ren & Heinrich summarize it as follows:

A Binance listing usually has a positive impact on the price of a crypto.

Despite the sudden rise in prices, the positive momentum was said to be “relatively short-lived.” Half of the projects lost their revenue about 2 weeks after listing.

Bull and Bear Differences

Additionally, listings during bull markets reportedly have more impact than listings during bear markets.

Average price on the first day after listing:

Taurus: Up 49% Bear Market: Up 34%

Average price on the 3rd day after listing:

Taurus: Up 34% Bear Market: Up 13%

Average number of days after listing with price above listing price:

Taurus: 18 days Bear market: 8 days

On the other hand, a similar study was conducted on Coinbase in 2021. Research by cryptocurrency analytics firm Messari in April found that cryptocurrencies listed on Coinbase saw a 91% price increase in the first five days.

According to an expert report, the volume shifted from Coinbase to Binance since 2021 marks a transformation in the industry:

It looks like we can expect a bigger upside reaction to the Binance listing in 2023, confirming the shift from the “Coinbase Effect” to the “Binance Effect”.

Information source: compiled by 0x information from KOINBULTENI.Copyright belongs to the author, without permission, may not be reproduced

0X simplified Chinese version:The Binance Effect of Altcoins: How Much Can Listings Boost Prices?

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