How Secondary Listings Affect Coin Prices

Purpose of the study: to show how secondary listing changes coin prices. 

It is widely known that an additional listing on exchanges with a good volume should positively affect token prices. Is it actually true? How much does the coins price change? 

The study in the initial sample used 56 API exchanges. Unfortunately, not all exchanges provide data on pairs listed on the exchange, and data on OHLC candles (open high low close), by which we can determine the date of the first daily candle on the exchange for a specific pair.

As a result of the analysis of the obtained data, we revealed the coins yield a week before listing, a week after listing, the result of these two weeks, and also their amount in the context of exchanges. We used filters (deletion) for strong volatility and top 5 coins. We also did not include exchanges that did a secondary listing with a small number of coins (less than 6).

We saw that the median yield for two weeks during the secondary listing period (listing between weeks 1 and 2) unfortunately shows a negative value on most exchanges.

The distribution of returns on exchanges changes if we take different periods of time (read more in our article). However, on the big picture, we can see that only a part of the secondary listings shows profitability or even super profitability when, in total, this is a loss-making phenomenon.

At the same time, the dynamics of profitability before secondary listing on average for exchanges are positive (read more in our article). However, after listing, the situation is different:

With a sample for all periods, the profitability of more “replicated” exchanges after listing is not the highest. It is worth noting a sharp drop in yields on the kraken exchange, which indicates extremely speculative news about the secondary listing on this exchange.

We also examined the activity of exchanges for a secondary listing of coins. The picture is pretty unusual, as you may see:

Adding new trading pairs, of course, says a lot about the nature of exchange policies and how they earn on their customers. But if the exchange thoughtlessly lists any coins that come across, this indicates their price tag and their attitude to the crypto industry as a whole. Unfortunately, some centralized Korean and Chinese exchanges, competing with each other, have a very aggressive policy of adding coins, while earning money on manipulations, acting together.

Unfortunately, a number of scam exchanges that very much manipulate volumes, such as Tokok, Bitforex, and several others, did not fall into the general sample. Studying the dynamics of the secondary listing, we've noticed very strange price movements of some coins. Apparently, the unwillingness of some exchanges to share their data shows us that this is a dark pool, which should be avoided by crypto investors since no one is safe from losses due to the unfair behavior of exchanges and insiders.

This study is prepared by Squilla Research Team. You can find the full article with HTML charts here.