More Than 80 Percent of 2025 Token Launches Are Underwater as Capital Rotates Into Crypto Stocks and M&A

The Token Graveyard Keeps Growing

More than 80 percent of tokens launched in 2025 are now trading below their token generation event price, according to a new DWF Labs analysis published on February 22, 2026. The report, built on Memento Research data covering hundreds of launches across major centralized and decentralized exchanges, found that typical drawdowns hit 50 to 70 percent within roughly 90 days of listing.

The numbers paint a bleak picture for anyone who bought into a new token this year. But the capital is not disappearing from crypto entirely. It is rotating, hard and fast, into regulated securities: crypto company IPOs, SPACs, and acquisitions.

Crypto IPO funding reached $14.6 billion in 2025, a 48x year-over-year increase, as of the time of writing. M&A activity hit $42.5 billion, the highest level in five years. The message from institutional money is clear: they want crypto exposure, but they want it wrapped in equity structures with clearer disclosure and enforceable rights.

Why 90 Days Is the Kill Zone

DWF Labs Managing Partner Andrei Grachev explained the mechanics behind the collapse pattern: "Most tokens reach a price peak within the first month then trend downward" due to selling pressure from airdrops and early investor unlocks.

The pattern is now predictable enough to be almost mechanical. A token launches with marketing hype, retail buys in at or near TGE, and then a cascade of selling begins. Airdrop recipients dump immediately. Early investors hit their first unlock window and take profits. Market makers reduce support as volumes decline. By day 90, the token has lost more than half its value and retail is left holding the bag.

This is not a new dynamic, but the scale in 2025 has been extreme. The sheer number of launches, many of which are low-quality meme coins or copycat DeFi protocols, has saturated the market. There is simply not enough demand to absorb the supply.

The Equity Trade Is Winning

While tokens bleed, crypto equities are thriving. Companies like Circle, Gemini, eToro, Bullish, and Figure have either completed or are pursuing public listings. Kraken raised $345 million through a SPAC deal that landed on Nasdaq. CertiK is reportedly pursuing an IPO at a $2 billion valuation.

The valuation gap tells the story. Public crypto equities trade at 7 to 40x price-to-sales multiples. Comparable tokens trade at just 2 to 16x. Institutional investors are paying a premium for equity because it comes with regulatory clarity, enforceable shareholder rights, and portfolio compliance.

WeFi co-founder and Group CEO Maksym Sakharov framed it bluntly: "When risk appetite tightens, investors demand cleaner ownership, clearer disclosure, and enforceable rights."

This is not a rejection of crypto. It is a rejection of the token model as the default fundraising mechanism. Institutional allocators who have portfolio rules about what they can hold, reporting requirements to meet, and fiduciary obligations to honor are choosing the path that lets them get crypto exposure without the legal ambiguity of token ownership.

What This Means for Token Holders

If you are holding tokens from a 2025 launch, the data is not encouraging. The 50 to 70 percent drawdown window is real, and most projects do not recover. The ones that do tend to have genuine product-market fit, active development teams, and a reason to exist beyond speculation.

For anyone considering new token purchases, the DWF data suggests a simple filter: wait 90 days. If a token survives the unlock cascade, the airdrop dump, and the initial hype decay with its community and development activity intact, it has a much better chance of being a real project rather than a launch-day pump.

The broader trend also suggests that stablecoin-based spending through crypto cards may be more practical than holding volatile newly launched tokens. Cards from providers like Crypto.com or Bybit let users hold stablecoins and spend directly, sidestepping the token volatility problem entirely.

The Structural Shift Beneath the Surface

This capital rotation is not just a cyclical mood swing. It reflects a structural change in how the crypto industry funds itself.

In 2021 and 2022, launching a token was the default. ICOs, IDOs, fair launches, and airdrops were the primary mechanisms for raising capital and distributing ownership. The regulatory environment was ambiguous enough that most projects chose tokens over equity because it was faster, cheaper, and reached a global audience.

By 2025, the calculus has shifted. The SEC's enforcement actions, MiCA's implementation in Europe, and clearer frameworks in jurisdictions like Singapore and the UAE have made equity structures more attractive for serious projects. A regulated IPO or M&A deal signals legitimacy in a way that a token launch simply cannot.

The $42.5 billion in M&A activity is particularly telling. When crypto companies are buying each other at that scale, it means the industry is maturing. Consolidation favors established players with real revenue, real users, and real compliance infrastructure. The long tail of low-quality token projects gets left behind.

For crypto card users, this consolidation trend has a direct impact. When vendors like OKX or Binance acquire smaller firms, they often integrate those capabilities into their existing card and payment products. More M&A means more feature-rich platforms, but it also means more concentration risk. If your card provider acquires a competitor, your options as a consumer shrink. Self-custody cards remain the hedge against this kind of platform consolidation.

FAQ

Does this mean all new tokens are bad investments? No. The DWF data shows that 80 percent are underwater, which means roughly 20 percent are holding above listing price. The challenge is identifying which tokens fall in that minority before the 90-day drawdown window closes.

Why are crypto companies choosing IPOs over token launches? Institutional investors prefer equity because it comes with enforceable rights, regulatory clarity, and compliance with portfolio rules. A token launch reaches retail quickly but struggles to attract institutional capital at scale.

Is the $42.5 billion M&A figure a sign of industry health? It depends on perspective. Consolidation means the industry is maturing and generating real revenue. But it also means fewer independent competitors, which can reduce innovation and consumer choice over time.

Should I wait 90 days before buying any new token? The DWF data supports this approach. Projects that survive the airdrop dump, unlock cascade, and initial hype decay with active communities tend to have better long-term prospects.

Overview

DWF Labs data confirms what many suspected: the 2025 token launch market is broken, with 80 percent of new tokens trading below their listing price and typical drawdowns reaching 50 to 70 percent within 90 days. But capital is not leaving crypto. It is rotating into regulated securities, with crypto IPO funding up 48x year-over-year to $14.6 billion and M&A hitting a five-year high of $42.5 billion. The shift reflects institutional demand for clearer ownership rights and regulatory compliance, not a loss of faith in crypto as an asset class. For individual investors, the takeaway is straightforward: be extremely selective with new token launches, consider the 90-day survival filter, and recognize that the industry's center of gravity is moving from tokens toward equity.