After placing an altcoin on any of the exchanges, it begins to trade in pairs with several assets. This event is called listing on the exchange. There is a primary listing (when the coin has not been traded on any exchange until that moment), and a regular listing (when the coin starts trading on this exchange). Usually, the listing occurs due to the demand for the coin from the users of the exchange, and hence the desire to buy this asset.
But what happens when demand and buyer numbers dwindle?
Sooner or later, such an asset is removed from the exchange. They do this because it costs money to support volumes on the exchange, and if it does not pay off with commissions of buyers and sellers, it is unprofitable for the exchange to keep this trading pair on its site.
This situation is called delisting – a process in which an asset and trading pairs are removed from a certain exchange, and users’ assets go into “withdrawal only” mode.
Yes, nothing happens to the coin after delisting – you can still use it. Only this time, unfortunately, outside the exchange on which the delisting occurred.
About the reasons
There can be many reasons for delisting an altcoin, but there are only a few main ones.
Falling interest in the asset
Scam of the coin (hello luna)
Death of the coin ecosystem
Uncovered evidence of a scam by the creators of altcoin
Fork of the coin
How is delisting done?
The exchange releases many posts on social networks, newsletters, blogs, and in all possible sources of communication with the client, information about the upcoming delisting. It’s almost impossible to miss, you will most likely find out about it even if you don’t own the coin.
The exchange chooses the time until which the asset will be traded on the exchange (usually more than a day), and gives the opportunity to sell (or buy) the asset to everyone during this time.
At the specified time, the trading pairs of the selected coin cease to exist, and all unsold coins are transferred to the spot section of the account in the “Withdrawal only” mode. Usually, the time for withdrawal is not limited in time.
How to be an investor
Unfortunately, delisting and delisting news is usually negative. The coin is very likely to lose value during and after the announcement of this event.
What an investor should do at the time of delisting is up to the investor to decide. Perhaps he counted on such an outcome of events, or simply hedged from such a situation.
If we talk about coins that are stored on the exchange, it is recommended to withdraw them to a hot / cold wallet in order to avoid unpleasant situations.
“Not your keys – not your money”
Trading situations on delisting news
As already noted, the delist is an occasion for large movements. Usually, at the time of the news, the volatility on the asset increases several times, and it goes in one direction. Usually – down, but there are exceptions.
Such exceptions are mainly delistings of futures pairs, but sometimes with spot. When the news is released, ~2 days before the immediate delisting, the spot asset at the moment can show up to 500% growth.
Growth in 15 minutes by 100%
The day before the announcement of the delisting of the futures pair, the asset rose quite well. After that, an announcement came out, and the asset covered spot demand. The price went up by 100%, after which it rolled back a little, and fixed on these values.
A smooth increase of 30% after the announcement of the delisting of the futures pair, after which the asset could not hold on to price values, and due to the predominance of supply, it dropped in price to the previous delisting values, and even lower.
Is it possible to make money on this? Undoubtedly. Is it worth it for beginners? An extremely controversial issue. As long as you do not have an established risk management system and a trading strategy for trading such moments, you should not go there.
You should not be afraid of delistings, they are part of the work of a trader or investor
Experienced traders can earn on news about the delisting of a futures or spot asset pair
When delisting a spot asset from the exchange, it is recommended to withdraw them to your own wallet