By
Bena Ilyas
June 28th, 2024
HC Capital revealed a multitude of tokens that went down more than 80% after their listing on leading crypto exchange, Binance.
The recent listings on Binance, the world’s largest digital asset trading platform by volume, have seen significant price crashes from their all-time highs in a very short period of time, and the crypto community has raised its eyebrows at the situation, sparking concerns among the holders of these tokens.
A few days ago, HC Capital, a crypto venture firm focused on decentralized finance (DeFi), metaverse, and Web3 sectors, took to social media platform X (formerly known as Twitter) to reveal a multitude of digital assets that went down more than 80% after their listing on the leading crypto exchange.
According to HC Capital, AEVO, PORTAL, STRK, SAGA, and DYM have all fallen by more than 80% from their all-time highs. On the other hand, AXL, MANTA, OMNI, PYTH, PIXEL, TNSR, and ALT have fallen by more than 70%. Other altcoins, including AI, BOME, WIF, XAI, JUP, METIS, REZ, and ETHFI, have fallen by more than 60%.
Notably, some of these projects, like AEVO, have received investments from Binance Labs, the venture capital arm of the crypto exchange. It is not uncommon to receive tokens in exchange for investments in the digital asset space, and the crypto community is left wondering whether the price crash of these tokens is an inside job.
CoinGecko data shows that in the last 30 days, AEVO, STRK, SAGA, PORTAL, AXL, WIF, TNSR, and DYM have all crashed by more than 40%, while MANTA crashed by around 25%. OMNI dipped by 18%, PYTH went down 31%, PIXEL crashed 34%, REZ declined 28%, and AI dropped by 37% in the same time period. Further, BOME, XAI, JUP, METIS, and ETHFI nosedived 38% in the past 30 days.
Some other tokens mentioned by HC Capital include ZRO, RON, and NOT, which are down by more than 40% from their ATH, along with IO and ZK, which have dipped by more than 30% from their ATH. TAO, ENA, and BB have dropped by more than 50% from their ATHs.
Reasons for the Crash
HC Capital pointed out that all these tokens crashed following their Binance listing and belong to diverse sectors like Layer 2, Layer 3, GameFi, and artificial intelligence (AI). They are significantly down from their all-time highs due to three major reasons, one of which is market volatility.
The crypto market is inherently volatile, and investors bet on smaller altcoins primarily because of the initial hype and speculation, which results in tremendous valuations that do not last long. A similar situation was witnessed during the 2021 market bull run as well, when tokens like The Sandbox (SAND) and Decetraland (MANA) achieved sky-high market caps.
Another reason for the decline in the prices of these tokens is low supply, which causes price swings, resulting in huge upward or downward movements in a brief period. Finally, HC Capital believes that high fully diluted valuations (FDVs) also lead to corrections in prices.
FDV includes the total value of a cryptocurrency project, taking into account all of its tokens that are in circulation. Considering the small supply and initial hype, the FDVs skyrocketed, only to be brought down by market corrections.