Focus on Market Cap, Trading Volume Rather Than Engagement for a Successful Token Launch, Research Shows
2025-07-09 09:09:05
Main Idea
Simplicity Group's study found that initial market cap and trading volume are more reliable indicators of a crypto token's short-term performance than social media engagement or VC backing.
Key Points
1. The study analyzed over 50,000 data points from 40 crypto token launches, focusing on metrics like initial market cap (IMC) and trading volume.
2. A strong negative correlation was found between a token's IMC and its price performance: a 2.7x increase in IMC led to a 1.37% drop in 1-week returns and a 1.56% drop in 1-month returns.
3. Initial circulating supply was deemed irrelevant for predicting one-week performance, but trading volume showed sustained correlation one month post-launch.
4. The study debunked the belief that well-funded projects backed by big VCs are guaranteed success, emphasizing product-driven content instead.
5. Social media engagement (e.g., likes on X) showed no statistical correlation with token price performance post-launch.
Description
Move over the endless X threads and VC endorsements. A deep dive into the token launch dynamics by Simplicity Group shows that token debuts are more about cold, hard fundamentals and less about hype and marketing. The firm analyzed over 50,000 data points related to 40 crypto token launches in the first four months of the year to derive following conclusions: Engagement isn't everything The popular notion in the crypto community is that increased activity on social media translates to a successf...
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