# Klein Labs’ Analysis of the Impact of Crypto Exchange Listings in 2024

The Wall Street Journal’s Crypto Correspondent – In the cryptocurrency market, ‘listing’ has evolved beyond a mere event; it has become a pivotal strategy that can sway market trends. Web3-based research institution Klein Labs has released a comprehensive report entitled “The Truth About Liquidity,” which meticulously analyzes the listing strategies and token performances of major global exchanges. The report, centered on listing cases throughout 2024, tracks token prices and trading volumes to unravel the practical implications of exchange listings.

# The Rise of Meme Coins and the Market Dynamics Altered by FDV Structure

One of the most significant shifts in the 2024 cryptocurrency market was the change in token distribution structures. Particularly, venture capital (VC) tokens, characterized by low circulating market capitalization (MC) but high fully diluted valuation (FDV), drew considerable attention. Consequently, the MC/FDV ratio plummeted to its lowest level in three years.

This structure, however, introduces a different kind of anxiety for investors. While token prices might initially surge, the eventual release of locked-up tokens could trigger massive selling pressure. This creates a latent ‘supply bomb’ that could explode at any moment.

This anxiety has naturally shifted interest towards meme coins. Most meme coins, being fully distributed at issuance, lack additional supplies that could flood the market. Their simple and predictable supply structure minimizes dilution risks, making them a more comfortable choice for investors.

Although meme coins might lack substantial usability and technological prowess, their simplicity and lower risk profile have garnered greater trust among investors. This shift is why meme coins are no longer seen merely as jokes but as ‘realistic investment alternatives.’ Exchanges have rushed to list meme coin projects, reflecting this trend.

# Different Exchanges, Different Outcomes

Klein Labs categorized exchanges into three types based on 2024 listing data: globally-oriented exchanges founded by Chinese entrepreneurs like Binance and OKX, Korea-based exchanges like Upbit and Bithumb, and North American and European-centric exchanges like Coinbase and Kraken. Each had distinct approaches in listing numbers, project types, and distribution structures.

Binance and Coinbase favored projects with high FDV linked to their ecosystems, adopting a restrained listing strategy. In contrast, Gate.io and KuCoin actively opened doors to meme coins and early-stage projects. Notably, KuCoin has pursued a licensing-based expansion strategy while complying with regulations and striving for global outreach.

# Upbit: The Symbol of ‘Kimchi Premium’ and Liquidity Concentration

Among exchanges, Korea’s Upbit stood out. It accounted for over half of Binance’s 24-hour trading volume post-listing and maintained a high market share even 30 days after listing. Some tokens traded at premium prices above the global average, exemplifying the ‘Kimchi Premium’.

This phenomenon is attributable not solely to the exchange’s popularity. Despite representing only 0.6% of the global population, Korea accounts for 30% of global trading volume, with one in three Koreans holding cryptocurrencies. The overwhelming investment ratio in the 20-30 age group further accentuates this unique liquidity structure, effectively making Upbit ‘the Binance of Korea.’

# Listing Effects: Binance Leads, Upbit Stands as the ‘Liquidity Giant’

Listing effects encompass not just trading volumes but also returns and price stability. Binance demonstrated the highest average returns within 7 and 30 days post-listing, coupled with the lowest coefficient of variation (price volatility indicator). This suggests that investors could achieve stable returns within a predictable trend. Conversely, high-listing exchanges like Gate.io and KuCoin frequently experienced price drops within 30 days, owing to dispersed liquidity that failed to offer substantial price support post-listing.

Upbit exhibited different strengths. Despite substantial volatility immediately post-listing, its high trading volume and extensive market participation facilitated rapid price recovery. Notably, due to Korea’s unique liquidity concentration, even ‘non-premiere tokens’ previously listed on global markets often generated robust reactions as if it were their initial listing on Upbit.

Hence, while Upbit’s returns might be lower than Binance’s, its liquidity inflow and market responsiveness are among the highest globally. This underscores the power of exchange listings in moving markets beyond mere price hikes.

Another intriguing observation is the correlation between the number of listings and Bitcoin price trends. Listings surged during Bitcoin’s bullish phases in March and from August to December, while they noticeably dwindled during its bearish spell from April to July. Despite this, Binance and Upbit maintained or even expanded their listing shares during downturns, demonstrating their resilience to market cycles.

# Exchange Selection Determines Success or Failure

In conclusion, token listing outcomes are driven not by chance but by exchange selection criteria and market structures. Tokens listed on exchanges with rigorous listing standards and high market credibility, like Binance and Upbit, consistently showed higher long-term returns and stability.

Particularly in the Korean market, the interplay of the ‘Kimchi Premium,’ a retail investor-centric trading environment, and a monopolistic liquidity structure has created unique dynamics where listings alone can trigger significant price surges.

Going forward, the critical question isn’t merely ‘which coin to buy’ but ‘where and under what structure has it been listed.’ With more meme coins expected to emerge and exchanges reinforcing their native chain ecosystems, the ability to interpret structural insights rather than just numbers will be crucial for survival in a liquidity-sensitive market.