What is a cryptocurrency listing and how can you lose money on it?

When you start looking into the cryptocurrency market, you initially get the impression that only the laziest people don't make money on it.

Some engage in arbitrage on various exchanges, others play on the cryptocurrency rate, and still others make money on listings.

Listing a cryptocurrency is the process of adding an asset to a cryptocurrency exchange, where traders can buy and sell the coin using other cryptocurrencies or fiat currencies. This means that after listing, it will be easy to buy or sell the new coin at the market price.

Before a cryptocurrency goes on sale, its price is rather arbitrary, and it's difficult to predict how much a new coin will actually cost.

It is expected that once a new cryptocurrency begins trading freely on the exchange, its price will inevitably skyrocket, and thousands of percent can be earned from this movement.

But is everything really that simple in this matter and how guaranteed is the profit?

Real-World Cryptocurrency Listing Experience

I usually do speculative trading of cryptocurrencies through a broker , but recently I had the desire to participate in trading on the initial cryptocurrency offering on Binance .

The Omni Network (OMNI) cryptocurrency was scheduled to list in the near future. By all indications, this coin was expected to appreciate significantly after the start of trading. The purchase was made without leverage through spot trading.

I wanted to buy the Omni in the first seconds after the listing, since, according to reviews, this is when the price increases rapidly.

The listing began at 2:00 PM, and my order opened at 2:00:17 PM, or 17 seconds after trading began, at a price of 49.96 USDT per coin. The trade took 17 seconds to open, even though I immediately clicked the "Buy Omni" button, indicating Binance's execution speed is quite impressive.

After the launch, the price began to decline rapidly, falling to 35.84 USDT per Omni in just 41 minutes. The position was closed at this price. The resulting loss amounted to approximately 30%.

Currently, the price of Omni is around $25, meaning that if the coins had not been sold, the losses would have been as much as 50%.

Losing money during a listing is also possible under other scenarios. The SAGA listing was an interesting example. Here, the scenario was slightly different: after trading began, the price began to decline, and only began to rise two hours later.

As a result, if you had bought SAGA at the initial price, you would most likely have sold it at the start of the downtrend and ended up with a loss again.

Ultimately, it seems that earning money through listing isn't as easy as others make it out to be. I preferred cryptocurrency farming , although there are still a lot of nuances to consider when participating.