How the Listing Process Works
Summary of the Listing Process
So you can sell your coins on the open market the coin must be ‘listed’ on one or more exchanges (you cannot ‘buy back’ your coins from the company other than under special circumstances such as ‘bonus buy-backs)
Listing a coin drives liquidity – or the ability to turn coins into ‘real money’ often referred to as ‘fiat’
Liquidity is created by people trading the coins – buying when they think the price is low, selling when they think it’s high – we aren’t in the ‘trading game’ – we just want our coins to increase in value – but this is driven by others trading
-
Listing a new coin is a bit like the process for listing a new company on the Stock Exchange
-
List the coin on a lower level exchange so it becomes publicly available and begins to ‘get noticed’
-
List the coin on higher level exchanges once the momentum starts to build
-
Other exchanges will then pick up and list the coin independently.
But how does a coin get listed in the first place?
-
The company listing the coin has to prove their own credibility
-
They have to prove the coin has a clear use case and potential value
-
They have to pay the exchange to list the coin (this is often a six figure sum)
-
They have to negotiate and sign off on several agreements including non-disclosure
This takes time but when all is agreed the Exchange, not the Company, will decide when the listing is to take place and announce it to their existing trader community. They will also in agreement with the Coin Company agree the price at which the coin will be listed on their exchange
Four things then influence the market value of the coins
-
Its perceived value and usability (what is the coin ‘for’ what value does it provide?)
-
The number of coins available together with the price
-
The ‘demand’ for the coin in the market – more people want to buy than sell
-
The ‘scale’ of its liquidity – fast or slow moving, high or low volume of trades etc.