Token Launch Bloodbath: Over 80% of New Tokens Launched in 2025 Are Trading Underwater
More than 80% of tokens launched this year are trading underwater, marking a significant shift in the market’s demand for venture capital-backed cryptocurrency projects. Data from Memento Research showed that the company tracked 118 major token generation events in 2025 and found that 100 of them, or 84.7%, are trading below their fully diluted opening valuations. At the same time, the median token in this cohort is down 71% from its launch price.
According to the company: “TGE in 2025 often marked the peak for most projects, with price discovery already occurring before TGE. When you buy at launch, you are essentially chasing rare outliers, while the median result is a drop of around 70%.”
The Mechanics of the Crash
To understand the severity of the decline, it is essential to distinguish between market cap and fully diluted valuation (FDV). Retail investors typically purchase the circulating supply, which typically represents 10 to 15% of the tokens actually available for trading. However, the price of this float is increasingly determined by the FDV, which represents the total value of the project once all venture capital and team tokens vest.
Memento’s report showed that the “low float, high FDV” model, in which projects are launched with a small circulating supply but a huge overall valuation, has hit a hard limit. It stated: “The clearest insight was how larger launches underperformed → the hyped high FDV token debuts dragged valuations down: 28 launches launched ≥ $1 billion FDV: 0% green, median decline ~ -81%. [Their] Opening valuations are set far too high and above fair value, resulting in poorer long-term performance with larger percentage losses.”
The Liquidity Vacuum
Meanwhile, this token’s underperformance wasn’t just due to poor tokenomics. It could also be related to a brutal macroeconomic environment in which the broader crypto market has struggled. According to data from CryptoSlate, the broader crypto market lost about $1.2 trillion in value between mid-October and the end of November.
During this period, Bitcoin fell about 30% from its peak of $126,000 to below $90,000. Nevertheless, it remained the main place for institutional flows and interest in the crypto market. This created a tiered liquidity environment. While the approval of spot ETFs in the United States has successfully funneled capital into Bitcoin and Ethereum, it has arguably cannibalized demand for riskier, long-term assets.
The “Predatory” Structure
Still, the sheer continuity of losses has reignited a fierce debate about the ethics of the current crypto venture capital model. Critics argue that the industry has optimized for “extraction” rather than value creation, and insiders have an incentive to sell into existing liquidity before the project has established a sustainable revenue model.
Omid Malekan, an associate professor at Columbia Business School, suspects the market is finally punishing this behavior. He said: “Raising too much money and pre-selling too many tokens destroys the value of cryptocurrencies. In the future, teams that continue to do this are doing it consciously. They are more concerned with getting a few dollars out than succeeding.”
Preparing for 2026
The wreckage of 2025 offers issuers and investors a clear roadmap for 2026. The market has signaled that it will no longer accept tokens that serve solely as a means of fundraising. The era of the “governance token” that does nothing other than vote on forum posts is coming to an end.
Nathaniel Sokoll-Ward, co-founder of RWA platform Manifest Finance, describes the current state of token design as “cargo cult thinking” because these projects mimic the aesthetics of successful networks without the underlying mechanics. He asked: “What problem does the token that equity or a traditional cap structure doesn’t solve? For most projects, the answer is nothing.”
For more information, visit https://cryptoslate.com/heres-why-4-out-of-5-new-tokens-launches-crashed-this-year/
