Why Are New Token Launches Underperforming?
Investor capital is moving away from newly issued tokens and into publicly listed crypto companies, according to research and commentary from market maker DWF Labs. The shift follows a pattern of steep post-launch declines across a large share of token generation events.
Drawing on data from Memento Research covering hundreds of token launches across centralized and decentralized exchanges, DWF said more than 80% of projects have fallen below their token generation event (TGE) price. Typical drawdowns range between 50% and 70% within roughly 90 days of listing, indicating that many public buyers face losses shortly after launch.
DWF Labs managing partner Andrei Grachev told Cointelegraph that the numbers reflect a recurring post-listing pattern rather than short-term volatility. “TGE price is the exchange-listed price set before launch,” Grachev said. “This is the price the token is set to open at on the exchange, so we can see how much the price actually changes due to volatility in the first few days,” he added.
The firm’s analysis focused on structured launches tied to projects with products or protocols, excluding memecoins. It identified airdrops and early investor unlocks as primary drivers of selling pressure after listing.
Investor Takeaway
How Strong Is the Shift Toward Crypto Equities?
While token performance has lagged, capital formation in traditional markets tied to crypto has accelerated. Fundraising for crypto-related initial public offerings reached about $14.6 billion in 2025, up sharply from the prior year. Merger and acquisition activity surpassed $42.5 billion, the highest level in five years.
Grachev described the trend as a rotation rather than an exit from the sector. “If capital were simply leaving crypto, you wouldn’t see IPO raises jump 48x year-over-year to $14.6 billion, M&A hit a 5-year high of over $42.5 billion, and crypto equity performance outpacing token performance,” he said.
In its report, DWF compared trailing 12-month price-to-sales ratios of listed companies such as Circle, Gemini, eToro, Bullish and Figure with tokenized projects. Public equities traded at multiples between roughly 7 and 40 times sales, compared with 2 to 16 times for comparable tokens.
DWF attributed the valuation gap largely to accessibility. Many institutional investors, including pension funds and endowments, are restricted to regulated securities markets. Public shares can also be included in indexes and exchange-traded funds, generating demand from passive investment products.
What Is Driving Institutional Preference for Equity?
Maksym Sakharov, co-founder and group CEO of WeFi, also told Cointelegraph that capital is moving away from token launches. “When risk appetite tightens, investors don’t stop craving exposure, so they start demanding cleaner ownership, clearer disclosure, and a path to enforceable rights,” he said.
Sakharov added that investors are directing funds toward businesses tied to custody, payments, settlement, brokerage, compliance and infrastructure. He said the “equity wrapper” appeals because it aligns with licensing, audits, partnerships and distribution channels.
According to Sakharov, the market increasingly treats tokens and operating businesses as separate assets. A token without steady users, fees, transaction volume and retention tends to trade on expectations rather than recurring activity, which helps explain why many launches rally early and then retrace.
Listed crypto equities are not automatically safer, but they offer reporting standards, governance structures and legal claims that fit within institutional portfolio rules. Holding tokens often requires custody approvals and internal policy changes that some allocators are unwilling to make.
Investor Takeaway
Is the Token Model Losing Relevance?
Grachev characterized the divergence as structural rather than cyclical. While tokens will continue to play roles in incentives and governance across crypto networks, he said institutional capital increasingly favors equity markets for exposure.
“Tokens won’t disappear, but we’re seeing a permanent bifurcation: serious protocols with real revenue will thrive, while the long tail of speculative launches faces a much harder environment,” he concluded.
If post-TGE performance continues to deteriorate while IPO and M&A volumes expand, the divide between token markets and listed crypto companies could widen further. For investors, the choice may no longer be between crypto and traditional finance, but between speculative token issuance and regulated equity exposure within the same sector.
