Listing and Delisting
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What is Listing on an Exchange
The main task of a crypto exchange is to offer tokens for trading and purchasing. When the exchange adds a new coin, this is called a "listing."
Impact of Listing on Value and Trading Volumes
Most often, when new coins are introduced on a major exchange, their price increases significantly.For example, let’s take the listing of the Trump coin. After the announcement, the price of the coin rose.
On the first day, the listing helped Trump increase in price. However, the token later returned to its previous level. Listing does indeed help a project gain temporary hype. However, long-term success is not guaranteed in all cases of coin listings.
Delisting
Delisting is the removal of a token and all its trading pairs from the exchange's list. Here is an example of what happened to the price after the delisting of the Waves coin from Binance:
After delisting, users can still trade the token on other platforms that support it, as well as through over-the-counter (OTC) transactions. Typically, following a delisting on major exchanges, the price of the coin drops, and traders can take advantage of this by opening short positions.
Listing and delisting of tokens provide traders with opportunities to profit from short-term hype.
The decision to delist can be made by either the project team or the crypto exchange. The reasons can vary:
- Low popularity of the asset.
- Failure to comply with listing rules.
- Violation of the laws of a specific country (in which case the token may only be delisted from the local platform).
- Technical difficulties in the project (e.g., attacks, exploits, or halted smart contracts).
- Criminal or reputational scandals associated with the project.