The Risks of Investing in New Cryptocurrency Tokens

02/17/2023 04:32 • Digital Disruptors • 94 views

According to the news on February 17, Chainalysis found after analyzing all the tokens launched on Ethereum and BNBChain in 2022 that out of the 1.1 million new tokens launched last year, if only the tokens that have been exchanged at least 10 times and traded for 4 consecutive days within a week after the release were calculated, the number of new tokens would be 40521. Of the 40521 tokens, 9902 (24%) had a price drop of more than 90% in the first week, indicating that there may be higher shipment activities. Chainalysis estimated that investors spent $4.6 billion in cryptocurrency to buy 9902 different suspected fraudulent tokens. Among them, 445 individuals or groups accounted for 24% of 9902 suspicious selling tokens.

Chainalysis: 24% of the new tokens in 2022 have the feature of higher shipment

Analysis based on this information:

The message highlights a concerning finding by Chainalysis, a blockchain analysis company, regarding the high risk of investing in new cryptocurrency tokens. The study focused on tokens launched on Ethereum and BNBChain in 2022 and analyzed their trading activities within the first week after release. Out of the 1.1 million new tokens launched during the year, only 40521 tokens met the criterion of being exchanged at least 10 times and traded for 4 consecutive days within a week after release.

The analysis revealed that 9902 of these tokens, accounting for 24% of the total, had a price drop of more than 90% in the first week, indicating fraudulent activities. Investors reportedly spent $4.6 billion in cryptocurrency to purchase these 9902 suspect tokens. The high number of fraudulent tokens and suspicious selling activities suggest a greater risk of scams and fraud in the cryptocurrency market.

It is worth noting that the data analyzed only covered a small sample of all new tokens launched on Ethereum and BNBChain in 2022, and the same analysis for other blockchain networks could lead to different findings. However, the evidence provided by Chainalysis points to the need for investors to exercise caution and carefully assess the risks before investing in new tokens.

In conclusion, the message serves as a warning to investors regarding the risks of investing in new cryptocurrency tokens, particularly those that show suspicious selling activities and price drops. As the cryptocurrency market continues to grow and evolve, it is crucial for investors to stay informed and vigilant in protecting their investments.

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The Risks of Investing in New Cryptocurrency Tokens

Chainalysis: 24% of the new tokens in 2022 have the feature of higher shipment

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