Much like fashion, cryptocurrency trends are circular. What’s in vogue one season is out of favor the next – only to return as the height of fashion the following season. As evidence of the repeating nature of cryptocurrency trends, one need only look to exchanges, where the preferred means of selling tokens to the public has undergone a 360º transformation.
Three years ago, new tokens were listed directly on exchanges. Then came ICOs, which begat IEOs, whereby tokens were sold on exchanges again, but via purpose-built launchpads. Now, as we enter the tail-end of 2019, the hottest new token launching mechanism is – wait for it – the exchange listing. Just to add to the recursiveness of it all, the exchange leading this revival is one that used to dominate the scene before Binance outmuscled everyone – Bittrex. Last week it successfully listed APM in this manner, and on November 21 it will follow suit with BLOCKTV’s native token.
Why the Exchange Listing Beats the Initial Exchange Offering
On November 14, Bittrex Global listed apM Coin (APM), the token of one of South Korea’s largest fashion malls. The listing was a resounding success, with APM appreciating in value in the days that followed. At the time of publication, APM appears to have achieved price discovery and is now swapping for around $0.17. Bittrex has been burned in the past with initial exchange offerings that have dumped upon launch, most notably with Ocean Protocol.
A simple exchange listing places less pressure on project and investors alike: a tranche of tokens is placed up for sale at a guide price and the market decides what happens thereafter. With a predetermined listing price, there is less FOMO, and less risk of private sale buyers dumping onto the market immediately after listing.
The success of the APM listing bodes well for BLOCKTV’s forthcoming event on Bittrex Global. On November 21, one fifth of the total supply of BLTV tokens will be listed on the exchange at a price of $0.01 apiece. What happens thereafter is for the market to decide, but given the success of APM’s listing, there is reason for confidence. Media startup BLOCKTV has revealed that its native token will form the backbone of the attention economy the blockchain broadcaster is building. BLTV will be used to remunerate providers of news tips, as well as for micro-tipping and to reward content creation.
Have IEOs Lost Their Luster?
There are signs that demand for IEOs has peaked, with The Block revealing that 90% of them have lost more than half of their value since reaching their all-time high. There have been some outliers however; Matic is currently sitting at an ROI of 5.2x, Wirex at 3x, and BitTorrent at 3.8x. The exchanges that were quick to plant their flag in the sand – notably Binance, BitMax, Huobi, and KuCoin – have recorded the greatest success with initial exchange offerings. Latecomers, Bittrex Global among them, have had less success.
In experimenting with exchange listings, Bittrex Global is returning to its roots. In the process, it is demonstrating that launching a new token needn’t be complicated. If BLOCKTV’s native token listing goes off without a hitch on November 21, expect to see plenty more of this formula replicated across exchanges in the months to come. The IEO might not be dead, but it’s facing competition from a token issuance framework of yore. The more things change, the more they stay the same.