The cryptocurrency community has been buzzing with a widely shared chart showing that many recent token listings on Binance have underperformed significantly. This analysis, originally based on a thread by Haseeb Qureshi—a managing partner at the prominent VC firm Dragonfly—has sparked intense debate about market structure, investor behavior, and responsibility. Are VCs dumping tokens? Are retail investors fleeing to memes? Or is the market itself broken?
Let’s dive deep into the data, dissect popular theories, and uncover what’s really happening behind the scenes.
The Data Doesn’t Lie: A Market-Wide Correction
A viral chart from @tradetheflow_ highlights a troubling trend: most new tokens listed on Binance in early 2025 have dropped sharply post-listing. Many of these are labeled as “high FDV, low circulating supply” tokens—meaning they launched with massive fully diluted valuations but minimal tokens available for trading.
After filtering out meme coins and projects that had prior token generation events (TGEs), the pattern remains consistent: nearly all these tokens declined in value around mid-April. What’s more striking is that they didn’t fall one by one—they dropped simultaneously, despite different launch dates, teams, investors, and unlock schedules.
This synchronicity is key. If individual factors like VC dumping or retail sentiment were solely responsible, we’d expect staggered declines. Instead, something broader occurred.
Debunking the Top Theories
1. VCs and KOLs Are Dumping on Retail
Theory: Early investors and influencers are selling their pre-sale allocations to unsuspecting retail traders.
Reality Check:
If this were true, tokens with shorter lockups should have dropped first. But they didn’t.
Most top-tier VCs operate under Rule 144a regulations, which enforce a one-year lockup for accredited investors. Given that none of these projects are a year past their TGE, major VC holdings remain locked. Even if some smaller funds or KOLs sold early, it can't explain why all tokens—regardless of investor quality—crashed together.
👉 Discover how top-tier investors manage token unlocks and market impact.
While isolated cases of dumping may exist, this theory fails to explain the synchronized downturn.
2. Retail Investors Are Abandoning Projects for Memes
Theory: The market has shifted from fundamentals to financial nihilism—retail traders now prefer Doge over DeFi.
Reality Check:
Let’s examine the data:
- Meme coin volume peaked in March 2025, especially on Solana DEXs.
- The broader token sell-off began in mid-April, over a month later.
- On Binance today, only ~14.3% of trading volume comes from meme coins.
Yes, memes are culturally loud—but they’re not economically dominant. Retail hasn’t collectively abandoned protocol-based investing.
Moreover, the idea that investors suddenly realized “VC tokens are scams” in April doesn’t hold up. Historical token allocations show similar team+VC ownership:
- Solana: 48%
- Avalanche: 42%
- BNB: 50%
- NEAR: 38%
These were all considered “VC-heavy” at launch—yet went on to succeed.
If structural ownership hasn’t changed, it can’t explain a new market phenomenon.
3. Too Little Circulating Supply for Price Discovery
Theory: With only ~13% of tokens circulating at launch, there’s insufficient liquidity for fair pricing.
Reality Check:
This is the most plausible-sounding explanation—and even Binance Research has highlighted it.
But context matters:
- The median IPO float in traditional markets is 12.8% (2023).
Historical crypto launches weren’t drastically different:
- IMX: 10% circulating
- APE: ~17% circulating
- OP: 5% circulating
Some projects like LDO (55%) or OSMO (46%) had high unlocks—but they launched before their Binance listing, making them outliers.
Also, if low supply were the main issue, we’d expect a strong inverse correlation between circulating percentage and performance. We don’t. All tokens fell—even those with relatively healthy floats.
WLD (2% circulating) is an extreme case, but most new listings fall within historical norms.
So while poor liquidity can distort prices, it doesn’t explain the systemic collapse across diverse projects.
So What Actually Happened?
The Hidden Catalyst: Geopolitical Turmoil
Here’s the missing piece: mid-April 2025 saw escalating tensions between Iran and Israel, raising fears of regional conflict and potential global market instability.
During this period:
- Bitcoin dipped but quickly recovered.
- High-beta assets—especially speculative, newly listed tokens—did not.
Why? Because markets reclassified these tokens as "high-risk, unproven ventures." When macro fears hit, investors flee to safety. These new tokens, regardless of fundamentals, were lumped into the same category as volatile microcaps.
It wasn’t about VCs, memes, or supply mechanics—it was risk-off behavior triggered by real-world events.
👉 See how geopolitical events impact crypto volatility and trading strategies.
If these tokens had surged 50% instead of falling, would we be blaming market structure? Probably not. Direction doesn’t negate mispricing—but context does.
What Should Change? Actionable Solutions
Instead of assigning blame, let’s focus on improvement.
For Venture Capitalists:
- Practice price discipline. Don’t treat paper gains as real.
- Advise founders to aim for sustainable valuations.
- Never mark locked tokens to market—top VCs already do this conservatively.
- Remember: a $1B FDV means nothing if the token crashes post-unlock.
For Exchanges (Like Binance):
- List tokens at lower initial prices.
- Use public auctions for pricing instead of relying on private round valuations.
- Enforce standardized lockups for all insiders—VCs, KOLs, teams.
- Display FDV countdowns and unlock schedules transparently.
- Prioritize projects with healthier circulating supplies (>10%).
For Project Teams:
- Aim to release at least 10–15% of supply at launch.
- Conduct meaningful airdrops to decentralize ownership early.
- Don’t fear a “low” initial price. A steady climb builds trust.
- Focus on product—not short-term price action.
“AVAX dropped 24% post-listing. SOL fell 35%. NEAR plunged 47%. And yet, all became top-tier ecosystems.”
— A reminder that early price action ≠ long-term failure.
Frequently Asked Questions (FAQ)
Q: Is the crypto market rigged against retail investors?
A: No system is perfect, but there’s no evidence of coordinated manipulation. Market moves are driven by psychology, liquidity, and macro trends—not conspiracies.
Q: Should I avoid all new Binance listings?
A: Not necessarily. Use caution. Research unlock schedules, team credibility, and circulating supply before investing.
Q: Are high FDVs sustainable in crypto?
A: They can be—if backed by real usage and revenue. But inflated valuations without fundamentals will correct, as we’ve seen.
Q: Was the April crash caused by exchange manipulation?
A: No data supports this. The timing aligns closely with geopolitical risk spikes—a known driver of crypto volatility.
Q: Can fair launches make a comeback?
A: Pure fair launches are rare now because building complex protocols requires funding. However, large airdrops and community-centric models are gaining traction.
Q: What’s the best strategy after a token dumps post-listing?
A: Avoid panic selling. If you believe in the project’s long-term vision, consider cost averaging. Many strong projects recover over time.
Final Thoughts: Trust the Market
When prices fall, people demand scapegoats—VCs, KOLs, exchanges. But markets are complex adaptive systems. Sometimes assets get re-priced not because of fraud or greed, but because risk appetite changes.
The free market corrects mispricing naturally:
- Overvalued tokens fall.
- Future rounds adjust downward.
- Investors learn.
No regulator or thought leader needs to intervene. The price signal is enough.
So if your token dropped after listing? You’re not alone. Build relentlessly. Educate your community. And remember: today’s downturn could be tomorrow’s opportunity.
👉 Learn how to spot undervalued projects before the next market cycle turns.
Stay curious. Stay skeptical. And never invest more than you can afford to lose.