The market is experiencing strong growth ahead of the Bitcoin ETF Spot approval deadline. Thanks to this rising wave, many Altcoins have grown strongly from several dozen to several hundred percent in just the past two weeks.
Not only have many new projects received strong increases, but many old names that seemed "outdated" also continued to grow.
So what are old coins and new coins? How to recognize them? What are the advantages and disadvantages of these coins?
Let's learn more with Allinstation!
Define
Old coins
Old coins are project coins that have gone through "pump & dump" cycles through ups and downs of the market. These are platforms that have proven their technological strength and have a loyal user base.
These coins usually have high circulating supply because most of them have gone through the stage of unlocking Token Lockup for MM or investors, with little risk of fluctuation because most initial investors tend to take profits in these coins. previous rising wave.
Usually, these old projects have all been Dump by small holder , with only a few people still holding the Token due to their intrinsic value. With the intention of maintaining prices or future plans, these platforms are also Token by the project team through Marketing, Reserve, DAO,...
Besides, the Token of many reputable projects have also undergone deflation.
Some typical Token : $LINK, $ SOL, $ APT, $ LTC, $ Peg, $ GAS, $ TRX,…
New coins
New coins are coins that have recently appeared or have recently appeared to create a push wave.
These could be the first large CEX listing projects or the first launch of platform Token for investors.
Investors often tend to invest in newly launched Token due to the appeal of the technologies offered by the project, as well as taking advantage of the initial wave of increased interest. In addition, with a low initial circulating supply, the value of the Token can easily be pushed or driven to any price path that the Market Maker desires.
Some typical Token : $TIA, $ARKM, $ MAV, $ MEME,…
Analysis of Pros & Cons
Advantages of old Coins
- The project has proven technology
Many blockchain platforms have gone through periods of market fluctuations but still retain their influence and technological value contributing to the ecosystem.
Not only retail investors but also large traditional businesses also support these names.
Ethereum is one of the earliest blockchains, but the value that this ecosystem brings to the present time is indisputable. Until now, there are still no blockchains strong enough to compete directly with Ethereum.
There are also a few other typical old coin projects that also have great technological influence: Chainlink ($LINK), Ripple ($ XRP ),...
- Low selling pressure
Once a project has proven its core technology, its Use Case Token is definitely something that users always look forward to. Instead of Dump for profit on GameFi projects or short-term "Ponzi" system projects, users tend to aim for Staking, Yield Farming or Liquid Staking to increase profits as well as benefit from higher prices. future treatment.
- Less risk of sudden collapse due to Dump
Old coin projects that are 4-5 years old mostly have high Token circulation supply because most have Token Lockup. When the circulating supply is higher, it is difficult for the Dump of goods from holder to collapse strongly.
Thanks to that, the risks from holding old coins are not too worrying.
- Token have little inflation
Normally, when first launched, a project's Token often experiences inflation problems. The reason for this lies in the policies of the project itself, such as the Marketing strategy to attract users to the protocol. Projects in the GameFi segment are platforms that take advantage of the "short-term" element of Token to attract maximum cash flow.
Then, going through the user outreach phase, projects need to ensure an economic picture so that they can be maintained long-term.
A typical example can be mentioned is Ethereum. This blockchain also experienced deflation for the first time since The Merge . The change from Proof-of-Work (PoW) consensus mechanism to Proof-of- Stake (PoS) has positively impacted the value $ETH in the long run. To date, more than 17,428 $ETH have been burned to ensure inflation is controlled.
$ XRP also has a deflation mechanism – the platform Token will be burned to pay for transactions. But in 2017, Ripple, the company that manages XRP, escrowed tens of billions of XRP to prevent market dumping. It periodically releases them to the market, thereby increasing the circulating supply.
Disadvantages of old Coin
- It is difficult to have strong growth potential
If having a high circulating supply can help old Coin projects avoid the pressure of Dump out that leads to price collapse, then having a circulating supply also makes the project's ability to push up prices more difficult. with Market Makers. If a price push is possible, it will either cost MM enormously to do so or undergo a drastic upgrade as is the case with CCIP from the Chainlink project.
- Technology may be too old
Typical examples: NEAR Protocol , Polkadot .
Near is a prominent Layer 1 platform during the “Uptrend 2021” with TVL peaking at $579M. However, at present this blockchain only has TVL ~ $146M according to defillama .
Projects in the platform's ecosystem also do not have too many notable activities, showing the ineffectiveness of Layer 1 compared to other projects such as Sui, Solana or Polygon.
There is also Polkadot, a project that "caused a storm" at the ICO in 2018 and became popular in 2020 - 2021. With the aim of building a Parachain ecosystem, creating a true decentralized system allowing users the ability to interact on the network. The most prominent among them is Moonbeam, the representative face of this old generation blockchain.
However, with the decline in the number of users and no outstanding updates, Polkadot has also become less attractive at the present time.
Read more: What is Polkadot ?
- Many Token have gone through a profit-taking period
Because it was launched a long time ago, most of the old Coin projects have been priced and profited by Market Makers since the 2020 - 2021 rising wave. After that time, the project's Token have gone through several stages of deep collapse. saw the Dip or were sold off to enter the next consolidation cycle.
However, because the first-generation holding team has taken all the profits, the price increase momentum of the older generation Token is not too high.
Advantages of new Coin
- FOMO community
When a Token launches, the community often tends to have FOMO at first. This is a very easy factor to encounter in a project when holder want to take advantage of the initial wave of purchases to make a profit. In particular, there are many cases where the launch has been continuously promoted, such as the case of $ ORDI.
- Many driving forces to increase prices
Because it is still a newly launched Token , investors participating in Private Sales rounds are still not satisfied with the listing price. Thanks to that, the project can look forward to future growth prospects. The most noticeable feature of these projects is that the new coins will go through a short accumulation period of 2 weeks to 2 months before proceeding to a strong increase.
Typical examples are Binance Launchpool and Binance Launchpad home projects such as Maverick Protocol ($ MAV), CyberConnect ($CYBER) or SpaceID ($ID).
- Avoid the limitations of previous projects
In previous market cycles, many projects encountered difficulties or obstacles that led to losing market share to competitors with better technology platforms.
Pioneering a Shard of the puzzle in the crypto market can attract a large number of users to use the protocol, but this cannot avoid technological and operational flaws. Many following projects also take advantage of this opportunity to upgrade operating quality and provide more "genuine" types of services than their predecessors, thereby attracting attention from the community.
Typical examples include Blur.io and Opensea.
Disadvantages of new coins
- Easily causes FOMO
If it is a narrative leader like the case of $BLUR then surely you will understand the harmful effects of fomoing the Token of the "leaders".
Blur.io is a project in the Non-Fungible Token-fi segment, initially strongly promoted and soon usurping Opensea, a large Non-Fungible Token Marketplace at that time. While some CEXs like Bybit list this pair of Spot Token as soon as they launch on February 14, 2023, with Binance, this coin is only available on Futures, a Derivative tool. This seems to be a price scouting activity by investors when there is no unit in the same segment to compare.
As a result, the price $BLUR from the time the Binance Futures listing was about $0.7 fell to a Dip of $0.15 before recovering again.
- Inflation situation
Projects often plan to unlock Token Lockup in a linear cycle of about 5 - 10 years to ensure the economic picture is maintained. If the economy cannot be maintained stably, inflation can occur with that protocol.
- Decrease in users after Airdrop
Many projects like Arbitrum, after announcing they would conduct Airdrop for users, have witnessed large flows of money pouring into this Layer 2 ecosystem. However, when paying Token, $ARB not only faced the pressure of being strongly Dump by Airdrop recipients but also witnessed withdrawals from the protocol due to the end of the Airdrop.
summary
Recently, Allinstation has provided you with information about the definition of new Coin and old Coin along with their advantages and disadvantages.
