Binance experts reveal threat from tokens with low circulating supply

Tokens
with
low
initial
circulating
supply
to
fully
dilute
value
ratios
and
threaten
the
crypto
market.

Binance
experts
have

published
a
new
report
analyzing
tokens
launched
in
2024.
The
study
shows
that
the
initial
circulating
supply
to
fully
diluted
value
(FDV)
ratio
was
the
lowest
in
several
years,
indicating
potentially
high
selling
pressure
that
could
negatively
impact
the
crypto
market.

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
constantly
growing.

With
a
capitalization
to
FDV
ratio
of
12.3%,
approximately
$80
billion
of
financial
injections
will
be
required
to
support
the
current
prices
of
these
tokens.
Experts
noted
that
this
will
support
demand
and
balance
pressure
from
sellers.

Low
circulating
supply
driving
initial
price
increases

The
main
reason
for
this
trend
is
the
low
volume
of
circulating
supply
when
tokens
are
launched.
With
the
same
volume
of
demand,
a
low
share
of
circulating
supply
stimulates
price
increases
at
the
project
launch
stage.

The
launch
of
such
projects
has
changed
the
market
dynamics,
increasing
selling
pressure.
According
to
the
report,
tokens
worth
$155
billion
will
be
unlocked
by
2030.
In
light
of
this,
it
is
extremely
important
to
consider
and
monitor
the
schedules
for
the
release
of
new
volumes
of
assets
onto
the
market.

The
role
of
meme
coins
in
the
market

Experts
conclude
that
structure
is
partly
responsible
for
the
new
wave
of
demand
for

meme
coins.
Moreover,
they
noted
that
some
investors
see
this
asset
class
as
a
way
to
counter
large
projects
that
are
launched
with
the
participation
of
institutional
investors.

Meme
coins
have
become
a
serious
part
of
the
landscape
in
the
crypto
world.
Analysts
at

Franklin
Templeton believe
that
this
type
of
asset
has
gained
popularity
due
to
the
desire
of
some
traders
to
make
quick
profits
with
low
fees.

The
excitement
around
meme
coins
does
not
subside.
These
tokens
are
still
showing

significant
growth
despite
the
overall
dynamics
of
the
crypto
market,
with
the
market
capitalization
of
meme

exceeding
$58
billion.