What actually happens when an altcoin is listed on an exchange?

[amphibian]

I have been contemplating on what happens when a particular altcoin is listed on an exchange. I think that, the team that owns the altcoin allocates some of their tokens to the preferred exchange custody so that the exchange can create some sort of initial buy or sell orders. This is something I have been contemplating upon for quite some time now. I want to find out different opinions from the house. So what happens when an altcoin is listed on an exchange?

[Zheko87]

The recent listing on the top exchanges does not give a fundamental growth. only a co-current pump is possible, and then a rollback and a further fall.

[nthere]

Thought I’d share this for all those exchange zealots out there...

... A project launches an ICO and brings in a decent amount of money. Ideally, that money should be used to build the product or service and add value to the project by allowing the company to hire more developers, fund more marketing, etc.

But instead, what happens so often is the ICO gets immediately put under an incredible amount of pressure from early contributors who got the deepest discounts (or biggest bonuses) to list on a major exchange as soon as possible. These contributors, who only play the short game, don’t care about the project or the crypto community. They’re here to arbitrage their connections and their ability to negotiate discounts as high as 90%, in order to monetize their gains and move on to the next desperate ICO who needs their ETH to help separate themselves from the rest of the ICO noise.

In order to satisfy the early flippers, ICOs need to pay an enormous listing fee to a major exchange. We’ve heard of Binance increasing their listing fee from $2m to a whopping $6 million, due to demand. And even if the project can come up with that astonishing amount, there’s still no guarantee that the exchange will list you. In our case, that means we would have to spend over 10% of our total raise, or over 10 cents of every contributor’s dollar just to list on Binance. It’s hard to justify how this listing could provide that much benefit to the token holders

Next, many major exchanges require that you retain the services of specific bots what’s known as market MAKERS (MM).

In simple terms, a MM is an entity that will make sure that their computer lists at least 10 buy orders and 10 sell orders on the exchange at any time. Some exchanges require 20 orders on each side, or even more. The job of the MM is to make it appear as though there is significant activity and liquidity on the market on both sides, and to generate the appearance of high volume.

This volume and low spreads gives speculators the artificial comfort that they can get in and out of positions at any time even if there is no real buyers or sellers on the other side.  It is estimated that close to 90% of all trades on exchanges are with such bots and not humans. The MM does not take any financial risk or benefit the token holders, as they merely create liquidity, but do not change the direction of price or net volumes over time.

MMs are not free, and it’s typically up to the ICO to pay for the services of the market maker. Naturally, those services are not cheap, and not surprisingly, the exchanges will happily put you in touch with, or force you to work with, a specific company which in many cases also represents the exchanges’ best interests.

Not only that, but exchanges often have a third fee. That is, the exchanges will demand a deposit of up to millions of coins or tokens from the ICO in what they call a “liquidity deposit” or charge.

Now, the exchange has the ICO’s coins, a market maker, and an army of speculators. They lay in wait for just the right time to front-run their own clients (the ICOs and users of their platform) and then short the market for said coin using the coins given to them on deposit by the ICO to try and earn obscene profits by watching the project pump and dump all the way down the price charts.

As these exchanges can see the trading volume and movement before you, they always win. If you have perfect timing and people in the know, you can make some money in this game, but most will eventually suffer terrible losses.

Binance announced that they plan to earn a profit of $1 billion this year. That money doesn’t just appear out of thin air. Instead, it was collected from ICOs in the form of these sky high fees, trading in front of their client orders and shorting their own listed coins. That billion dollars Binance pocketed for itself (and that includes the distributions they make to their own BNB coin holders) doesn’t benefit the crypto community in the long term..... my

- Alex Mashinsky, CEO of Celsius Network (via DC)

[sikonamixx]

usually as i have been watching during the last few months; whenever
an altcoin is listed on an exchange the price goes down especially
 if that altcoin has already allocated a large amount of coins to bounty hunters
who immediatelly dump their coins cheap on those exchanges.

[passwordnow]

if that altcoin has already allocated a large amount of coins to bounty hunters

Another thinking that the bounty hunters shall be the one and responsible for those dumps that happens on exchange.

Why not look at those developers that are dumping it when their token has enough value to make some money?

[joel123]

When an altcoin is listed on the exchange, it makes transactions with it easier, faster and better. You can easily sell off your coins, or buy more. You can trade your coins for the new altcoin that just got listed. Also, it makes the project more trustworthy. People believe that a coin that has been listed on an exchange has an advantage over the one that hasn't.

[yanto@1977]

I have been contemplating on what happens when a particular altcoin is listed on an exchange. I think that, the team that owns the altcoin allocates some of their tokens to the preferred exchange custody so that the exchange can create some sort of initial buy or sell orders. This is something I have been contemplating upon for quite some time now. I want to find out different opinions from the house. So what happens when an altcoin is listed on an exchange?

It will create trust ( supply & demand ) in high quality and quantity, every project need that to increase their performance. Listing on exchange is powerful step enter the market without that coin will never have value. Besides that, until now there's no project can't survive without listing, trust me.

[manwithsuit909]

check with their official normally after ico

[elosi]

I think the team normally give the exchange some coins and when listing happens, the exchanges will be first to dump, because almost all the ICO that got listed on the exchange recently normally goes below and most of these coins offers no bonus, no bounty, then how did the price goes below ICO price? so that's why i think the exchanges dump first.

[vallytech]

These days because of the bear market when altcoins get listed on the exchanges, it normally go down below the ICO price unless the altcoin is the one that has so much hype then it will go high and later dip down again.

[Neytiri]

  listing a  altcoin on an exchange is the final step when a new altcoin finish its ICO and it is so important because then only we can see the truly value of the altcoin and where we can trade the tokens and starting gainig from it.

[Rammygold]

What really happens when an altcoin is listed in an exchange is that you can easily turn it to cash or pair it with etheruem any option you prefer in the two, but bounty hunters that help promote and create awareness about the project are also the ones that won't allow the project to grow because immediately bounty hunters receive their stakes they always dump them for cheaper prices for prices even lower than the ICO price, which always drop the value of the coins.

[iwah]

Before a coin gets listed on the exchanges, the exchanges normally allow some time for the depositing of the coins, when enough coins have been deposited then they can open trading on the coin

[lobo13hf]

I have been contemplating on what happens when a particular altcoin is listed on an exchange. I think that, the team that owns the altcoin allocates some of their tokens to the preferred exchange custody so that the exchange can create some sort of initial buy or sell orders. This is something I have been contemplating upon for quite some time now. I want to find out different opinions from the house. So what happens when an altcoin is listed on an exchange?

That's true, i remember QKC has offered a lot of QKC coin to the binance and additional payment in the fiat or major coin to be listed on there. There was a cooperation between exchange site and the team. But that will give a short term impact to the altcoin. The market will try to create a little bit noise to attract the traders.

[Qirtov]

Is that a good point when a coin is listed on the exchanges? I'm still little bit confused. But, I think that it may depend on the exchanges. not all exchanges are good for the growth of the coin price and rate.

[Lighthouze]

It's often touted around the space that bounty hunters and airdrops hunters cause the crash in the price of tokens, but in the actual sense, a lot of shady activities go on behind the scenes. Some of the buy and sell walls we see on these exchanges aren't real, this has been confirmed by a lot of traders.

[Phantomberry]

I think it depends on the community and the traders of what exchange listed of your altcoin there's massive adoption will going on that maybe your altcoin will be pump to the moon or maybe it will dump.

[Caladonian]

It's often touted around the space that bounty hunters and airdrops hunters cause the crash in the price of tokens, but in the actual sense, a lot of shady activities go on behind the scenes. Some of the buy and sell walls we see on these exchanges aren't real, this has been confirmed by a lot of traders.

Yes, with that certain moves most of them are just purely pumped and dumped bot, the dev allocates portions of the ico funds for the listing and also to create transactions, its affect the value right away when bounty hunters sell out and the allocated funds already wash away, the real time of trading activity begins when major exchange has been reached by the coin.

[askmecrypto]

I have been contemplating on what happens when a particular altcoin is listed on an exchange. I think that, the team that owns the altcoin allocates some of their tokens to the preferred exchange custody so that the exchange can create some sort of initial buy or sell orders. This is something I have been contemplating upon for quite some time now. I want to find out different opinions from the house. So what happens when an altcoin is listed on an exchange?

This is not necessarily true, there are multiple exchanges out there which have there own rules, some charge the fees in ETH or BTC for listing and they dont take the ALTs from the projects, other take BTC and ETH as in fees and a portion of tokens so that they can initiate the liquidity of tokens on there exchanges.
Teams specifically are not supposed to move tokens from there wallet to exchanges for selling purposes, if they do they are visible to the community and is a really bad impact for the project as the investors lose trust on the project by doing so.

[Sanford]

Hunters drop only because most of the projects are not stable and bend in the first months after the end of the ICO for these bounty-exchanges and pour their savings, what would at least something to earn.