Haseeb Qureshi, managing partner at Dragonfly Capital, has raised questions about the prevailing theories surrounding recent token listings on Binance.
According to Qureshi, the drop in prices for these tokens over the past six months may be more complex than simple venture capital (VC) dumping.
In an article published on May 19, Qureshi responded to data shared by @tradetheflow_, highlighting that many tokens with high fully diluted valuations (FDV) but low circulating supplies have seen significant declines.
This has led to speculation about market manipulation, with some blaming VC firms and Key Opinion Leaders (KOLs) for dumping tokens on retail investors.
However, Qureshi refutes these claims. He pointed out that most top-tier VCs have a minimum one-year lock-up period before they can sell their tokens.
“Every single one of these tokens is less than a year from their Token Generation Event (TGE), meaning VCs with one-year cliffs are still locked,” Qureshi explained.
Qureshi also proposed an alternative explanation for the price drops.
He noted that the stability of these tokens remained intact until mid-April, coinciding with a broader market downturn partly influenced by geopolitical tensions in the Middle East.
He suggested that these new projects have been collectively labelled as “risky new coins,” leading to decreased market appetite. “The market decided they didn’t want to buy them back,” he stated.
Addressing another theory, Qureshi dismissed the idea that retail investors were selling these tokens to invest in meme coins.
“Memecoin mania was a full-on frenzy by March, but the basket dumped in April, a month and a half later,” he said, indicating that the timing does not align.
A crypto researcher at SwissBorg, using the alias @tradetheflow_, had noted that 80% of tokens listed on Binance over the past six months have lost value.
The researcher highlighted that these tokens, backed by major VC firms like Coinbase Ventures, Pantera Capital, Paradigm, and Dragonfly, underperformed.
Only a few tokens, notably meme coins and those not backed by major VCs, managed to post positive returns.