The popularity of virtual assets has a lot to do with how large the number of users using them is. The more significant an asset’s community, the higher its price can be. A classic example is Bitcoin and cryptocurrencies that are in the top 10 by market capitalization. To increase the popularity of a cryptocurrency, different methods are used, and the most well-known of them is listing.

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Definition

Listing – it is the start of cryptocurrency trading on exchanges where various virtual assets are listed. Put differently, listing is the process of placing an asset on a cryptocurrency exchange to start trading.

The listing of a cryptocurrency indicates that each of the users can apply it to buy and sell it on the market. Such a move usually increases the liquidity of the coin. If it is presented on a large marketplace with many traders and investors, the liquidity can increase dramatically.

Listing also has a marketing component. Representatives of the trading floor where the cryptocurrency listing is announced, as a rule, officially announce it in their social channels, which means that a more targeted and experienced audience gets acquainted with the token. In turn, cryptocurrency news aggregators and news portals also track new coins and publish information about them. Such a campaign attracts more attention from investment funds and traders.

How cryptocurrency exchanges are listed

In 2022, there will be new coins on the virtual asset market. Teams continue to create cryptocurrencies, and listing will ensure that they are available for trading and users. In addition, it is necessary to prove that the project is not fraudulent. This also requires a listing.

Cryptocurrency listing can be divided into several stages

Choosing a listing platform and submitting an initial application.

This point is mandatory for all applicants for listing. The feasibility, mission, team and values of the project are evaluated in equal conditions. If positive, a contract is signed and the next process is initiated.

Technical analysis and evaluation of social activity.

At this stage, the cryptocurrency applicant undergoes a technical analysis, evaluation of product efficiency, transparency and legitimacy of economic processes. Also, exchange representatives analyze social networks and community activity, how much interest in the cryptocurrency corresponds to reality.

Preparation of the listing, technical integration.

After a complete analysis of the applicant project, the exchange and the developers enter the necessary technical information and prepare the agreed trading pairs for the start of DIS trading.

After that, the team can officially declare that the coin is listed on the exchange, and the site administrators do the same.

How listing affects the value of a coin

More often than not, the value of a token goes up as soon as an exchange announces that it plans to list. This is especially true for large exchanges like Binance, Huobi, Coinbase and others.

There is a whole trend for cryptoinvestors, where users track exchange announcements and try to catch a new trading pair at a lower price. Binance even has a “New Listing” tab that contains tokens and cryptocurrencies recently added to trading.

When a cryptocurrency is listed on an exchange and trading on it opens, its price can rise amid heightened interest. Let’s take the example of FC Barcelona Fan Token (BAR) as an example of price movement. It began selling at the end of July 2020, and until BAR’s listing on Binance, its price held steady at $10-15 per unit. Note the graph of the change in the value of the token after the announcement of the listing on the world’s largest exchange and on the opening date of trading. The positive news helped the token rise to its own ATH of $72.55 on Coingecko, and $77.80 at the start of trading on the exchange.

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However, the listing may not cause the coin’s price to rise immediately. In the case that it took place immediately after the ICO was held, investors may well have their profits locked in. As an example, we can point to the listing of the KNC coin on the Binance exchange. When it was listed on Binance, the value of the asset declined smoothly for a couple of months.

In addition to listing, exchanges also conduct delisting.

Delisting

Delisting is the removal of a coin from an exchange’s registry. Sometimes exchanges delist for several reasons. In particular, if the trading volume on the exchange is low. A drop in trading volume is caused by the fact that traders and investors don’t want to keep coins on the balance. If the turnover is low, the commission fee is also low, forcing the exchange to delist the asset.

Delisting can be due to scandals that may be associated with developers. A prime example is the delisting of XRP from Ripple from many exchanges. Influenced by negative news about the beginning of the SEC litigation against XRP issuer Ripple, the price of the cryptocurrency dropped 50%, and the major exchanges Kraken, Coinbase removed trading pairs with XRP from their platforms.

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Results

Thus, the listing of coins on cryptocurrency exchanges is a tool that attracts the attention of traders and investors. The further fate of the asset and its capitalization largely depends on how it is conducted. Teams of new coin developers need to think carefully about the promotion strategy of their coins, so that the exchange does not delist the cryptocurrency later.

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