What to Know
- Around 85% of crypto tokens launched in 2025 are trading below their launch price, with many down over 70%.
- Crypto VC returns and new fund launches have dropped sharply since the 2022 funding boom.
- Old VC capital is still being deployed, but hype-driven token launches are losing market trust.
Most crypto tokens launched in 2025 are now trading below their starting price, according to new data shared by The DeFi Edge and other research groups. The numbers show a tough market for new projects and also a sharp slowdown in VC success in the crypto space. This marks a big shift from the hype-heavy cycle seen just a few years ago.
Most New Tokens Are Losing Value
Data from market researchers shows that roughly 85% of tokens launched in 2025 are trading below their first valuation. The median drop is more than 70% from launch levels. That stands in stark contrast to the previous bull cycle in 2021, when a number of high-profile tokens including MATIC, FTM and AVAX surged after launch. In past many new tokens jumped after listing on major exchanges. In 2025, the opposite often happened. Exchange listings sometimes became a sell signal instead of a buy signal, with prices dropping quickly after trading opened.
85% of token launches in 2025 are underwater.
VC backed deals barely break even and some are deep in the red.
Back in the day having a “Top VC” on the cap table was a huge catalyst, but not anymore. This chart from Galaxy Research tells the story.
In Q2 2022, crypto VCs… pic.twitter.com/HAdlXAYccA
— Edgy – The DeFi Edge 🗡️ (@thedefiedge) February 17, 2026
Market watchers say too many tokens entered the market at the same time, while buyer demand stayed limited. This created constant selling pressure.
VC Boom Turned Into VC Slowdown
Crypto venture capital also looks very different today compared to 2022. In the second quarter of 2022, crypto VCs raised nearly $17 billion across more than 80 new funds. At that time, investors were eager to back almost any crypto pitch. Since then, returns have dropped and interest has cooled.
New VC fund creation recently hit a five-year low. Last quarter’s fundraising was only about 12% of the levels seen in Q2 2022. While VCs still invested about $8.5 billion last quarter, up strongly from the previous quarter, most of that money came from funds raised back in 2022, not from fresh capital. Many VC-backed token deals are now barely breaking even, and some are deeply in the red. Having a “top VC” listed as an investor used to boost trust and price. That effect has weakened a lot.
Token Structure Hurt Prices
Traders say token design is another big reason for poor performance. A common problem is low circulating supply but very high total valuation. That means only a small number of tokens trade at first, while a large number unlock later. When those locked tokens are released, heavy selling often follows. Some users track simple signals like how many tokens will unlock in the next 90 days compared to current supply. If that number is high, prices often keep falling even if the project sounds strong.
Another issue is that some tokens start trading in futures markets even before normal spot markets. This allows early short selling and can push prices down faster. Wide airdrops and exchange giveaways also spread tokens to many short-term traders who quickly sell, instead of long-term users. Many 2025 tokens also lacked clear real-world use. Analysts say a token needs a strong reason to exist inside its product, not just as something to trade. But many teams launched tokens before their products had real users or revenue. Regulatory uncertainty added to the problem. Without clear rules, many teams avoided giving tokens strong value features, making them less attractive to hold long-term.
What Comes Next
Some market participants believe this weak trend will continue into 2026, with even more new tokens struggling after launch. Retail buyers have become more careful, especially with VC-heavy projects and complex token supply plans.
Still, some see a positive side. As easy VC money and hype-driven launches fade, projects with real users and real income may stand out more. Builders are now being pushed to focus on product quality instead of quick fundraising.
Also Read: Kevin O’Leary Flags Quantum Computing Risk Amid Bitcoin’s Volatility
