Star Xu, founder of major cryptocurrency exchange OKX, has warned against frequent sell-offs of newly listed altcoins.
Specifically, he points to the rapid decline of the Aevo token, which fell from nearly $4 in March 2024 to its current value of $0.434. That’s a 90% drop in value in just five months.
Aevo Announces Purchase to Create Long-Term Value for Token Holders
Mr. Xu’s criticism goes beyond market fluctuations and extends to the ethical responsibilities of cryptocurrency exchanges.
In a Twitter post, Xu questioned the motivations of cryptocurrency exchanges for listing new tokens, arguing that such behavior often leads to rapid sell-offs, which primarily benefit early holders and harm the broader user base.
“How can we protect this market when there is currently no oversight of listings and share reductions? This is something the entire industry needs to reflect on,” said Star Xu.
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Echoing Xu’s concerns, prominent crypto investor RamenPanda pointed to a shift in how project developers approach token sales. In the past, founders invested heavily in their own cryptocurrencies. Today, developers often use tokens simply as a means to collect and cash out USD.
“The token itself has become an intermediary tool for cashing out US dollars. The developers of this project do not believe in Bitcoin, let alone their own token,” RamenPanda criticized altcoin developers.
Additionally, in response to these issues, the Aevo team implemented a token buyback strategy to stabilize the price. In July, they bought 1 million AEVO at an average price of $0.446.
“We have committed to repurchasing at least 1 million AEVO each month from July through December. With the AEVO supply nearly fully secured and buybacks beginning, we believe this is a great starting point to create long-term value for AEVO token holders,” the team announced.
However, Aevo is not the only token facing these challenges. Recent data from the Dune dashboard VC Printer shows that several altcoins are under similar pressure. For example, venture capitalists (VCs) holding Ethena (ENA) have unrealized profits of 73x, which could have a major impact on the market if these profits are realized.
Additionally, the token unlock event contributes to market pressure. The 600 million W tokens that Wormhole will soon release constitute 33% of the circulating supply, and are expected to introduce significant selling power into the market.
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Likewise, last week AltLayer unlocked $100 million worth of ALT tokens, which represent about 42% of the supply. If stakeholders sell tokens on the open market, this could create price pressure.
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