Market Reaction to Exchange Listing of Cryptocurrencies

There are hundreds of cryptocurrencies getting launched every month; some may be more promising than others. Therefore, exchanges first vet and decide which tokens to offer their users for trading, some may do even more rigorous vetting than others, especially Coinbase, Binance, FTX, etc. Not every coin gets to list on those top 4–5 exchanges. Many holders of various coins constantly bicker to list their favourite coins — often because they hope it could lead to a price pump. Here’s the data of what percentage of tokens got listed on some of the top exchanges in the last 3 months:

Coinbase, FTX, and Binance as compared to other exchanges have been less willing to add new tokens and when you look at Kucoin, MEXC, or Gate.io, they have been adding new tokens almost on a daily basis. Binance, Coinbase, and FTX take a little more cautious approach and have rigorous due diligence before listing. In an article published on Binance, they mentioned, “There is a 98% chance you won’t hear from us after you submit your application. This is the norm.” and “We don’t reject applications outright (unless you get on our blacklist). Your project may improve over time. Even if we don’t list it now, we may list it later. So, continue working on your project, not on persuading us.”. They also mentioned “We want good coins listed on Binance. It’s simple, and every coin is different. In general, we like coins with a proven team, useful product, and a large user base. We don’t have any hard requirements, as any requirement we publish will likely be reverse-engineered.”

So, how do those exchange listings impact the asset price?

Obviously, listing on prominent exchanges gives the assets more exposure, liquidity, and volume. Cryptocurrencies listing news does move the asset price but not all announcements create equal opportunities. When an exchange announces its plan to initiate trading of a certain pair, there is generally a time gap between the announcement, and when the trading actually begins on the platform. Overall, in those time-gaps Binance and Coinbase have had the highest asset impact in terms of price gains. Then comes the other platforms like Kucoin or MEXC which typically offer new listings on a daily basis. On average, asset price usually pumps 60–70% in just a few minutes after the listing announcement on Binance. Of course, this pump would depend on the exchanges the token is already listed on, its liquidity, market conditions, etc.

The outcome or the post-listing gains of those pairs is just not as simple as it seems. Below are the average return stats collected from some of the top coins listed on various exchanges. Of course, the data could change entirely in some other market cycle or by choosing other sets of tokens for data as not all listings are equal.

Since Gate.io and MEXC list a lot of tokens that are generally not available for trading elsewhere, their post-listing returns seem to be quite high as compared to Coinbase, FTX, and other exchanges. While Coinbase-listed pairs usually retrace back to their listing price, Binance daily and monthly returns (if APE and GMT return data are to be included), could go north of 800% and 3000% respectively. Usually, the end effects are short-lived and it’s nearly impossible to predict which way each asset price could go after listing, but the growth and the exposure one project/token gets from these listings is enormous, which is needed for their sustainable growth in the future.

Disclaimer: While every effort has been made by us to ensure the reliability of the information disseminated through this article, the data mentioned in this article may not represent an accurate description of how a listed token should behave for that exchange in that time interval. These are the average data of some randomly selected tokens whose monthly data were available on those exchanges. It may change for different sets or in different market conditions. We are also not responsible or liable for any damages incurred from acting upon the information provided in this article for any financial and trading-related activities.