Imagine pouring your hard-earned money into the next big crypto project, hyped to the moon by top venture firms and buzzing communities, only to watch it tank hard within months. That’s not some rare horror story anymore. In 2025, it’s become the harsh reality for the vast majority of new token launches.
I’ve been following the crypto space for years, and this year feels different—almost like the rules have shifted under our feet. Recent data paints a pretty grim picture: a staggering 84.7% of tokens that hit the market through Token Generation Events (TGEs) are now trading below their initial valuations. Yeah, you read that right. Four out of every five launches are in the red.
The Brutal Reality of 2025 Token Launches
To put some concrete numbers on it, researchers tracked 118 TGEs throughout the year. Out of those, 100 are underwater. The median drop? A painful 71% decline in fully diluted valuation (FDV), with market caps down around 67%. Only about 15% managed to stay above water. It’s enough to make even the most optimistic crypto enthusiast pause and rethink their strategy.
Frankly, in my experience watching bull and bear cycles, I’ve never seen such a consistent pattern of post-launch bleeding across so many projects. Sure, crypto is volatile by nature, but this feels systemic. Something’s changed in how these tokens are priced, distributed, and perceived by the market.
Why Are So Many New Tokens Crashing?
Let’s dig a bit deeper. One big factor seems to be the sky-high valuations at launch. Many of these projects come out of the gate with nine or even ten-figure FDVs, fueled by massive venture capital rounds in previous years. When retail finally gets access at TGE, the price discovery often reveals that the hype doesn’t match the fundamentals yet.
Think about it: if a token launches with a multi-billion dollar valuation before having substantial on-chain activity or real user adoption, gravity tends to kick in pretty fast. Market participants start asking tough questions. Is the product live? Are people actually using it? Does the tokenomics make sense long-term?
Another angle I’ve noticed is the shift in liquidity patterns. With more sophisticated players in the space—hedge funds, market makers, and algorithmic traders—dumps happen quicker and more efficiently. Retail buyers jumping in at TGE often end up holding the bag while early investors and insiders exit at premiums.
“2025 token launches have mostly been a bloodbath. This means ~4 out of 5 launches are below their opening valuation.”
– Crypto researcher tracking TGE performance
That quote sums it up perfectly. It’s not just a few bad apples; it’s the majority.
The Worst Offenders: Eye-Watering Declines
Some of the drops are absolutely brutal. We’re talking 90%+ wipeouts from launch FDVs. Projects that raised from prestigious venture firms, had massive marketing pushes, and generated huge pre-launch buzz still couldn’t escape the carnage.
For instance, several tokens saw their valuations sliced by over 93%. One that started around $940 million now sits at under $60 million. Another launched near $870 million and has dwindled to roughly $56 million. These aren’t obscure memecoins either—many had solid teams and ambitious roadmaps.
Even higher-profile ones with billions in initial FDV have cratered. One dropped from over $4 billion to around $300 million. Others from $2 billion ranges down to the low hundreds of millions. It’s a pattern that repeats across both early-year and later launches.
- Tokens with massive venture backing still faced 90%+ drawdowns
- High FDV at launch correlated strongly with steeper corrections
- Both infrastructure projects and consumer apps suffered similarly
- Lower-cap launches didn’t fare much better proportionally
Perhaps the most interesting aspect is how consistent this is across different sectors. DeFi protocols, gaming platforms, AI-related chains—doesn’t seem to matter. The post-TGE performance has been rough almost universally.
Venture-Backed Projects Aren’t Immune
One narrative that got shattered this year is the idea that top-tier VC backing guarantees success at launch. Plenty of projects backed by the biggest names in crypto venture capital still experienced massive drawdowns.
Tokens launching with $1-2 billion FDVs, armed with investments from household-name funds, still plunged 85-90%. It suggests that the market has become more discerning. Retail isn’t blindly aping into anything with a fancy investor list anymore.
In my view, this maturation is actually healthy long-term. It forces teams to focus on building real value rather than relying solely on fundraising prowess and marketing. But short-term? It’s painful for anyone who bought at TGE expecting quick gains.
What About the Winners?
To be fair, not everything is doom and gloom. That 15% trading above TGE valuations represents real outliers—projects that delivered updates, grew user bases, or benefited from broader market tailwinds.
These successes often share common traits: more reasonable launch valuations, strong product-market fit from day one, or unique positioning in hot narratives. But they’re definitely the exception rather than the rule this year.
It’s worth studying these winners closely if you’re looking for patterns. What did they do differently in terms of token distribution? Community engagement? Development pace? There are lessons there for future cycles.
Is Buying at TGE Still Worth It?
This is the million-dollar question—or rather, the multi-billion FDV question. The data strongly suggests that buying at launch has become one of the riskiest moves in crypto right now.
Retail investors used to have an edge getting in early through public sales or exchanges. But with most tokens unlocking significant portions early and insiders often getting better terms, that edge seems largely gone.
Some analysts are even saying “TGE isn’t early anymore.” It’s a provocative take, but backed by the numbers. Waiting for price discovery post-launch might actually offer better risk-reward in many cases now.
“TGE isn’t early anymore reee.”
– Market observer commenting on launch dynamics
Of course, this doesn’t mean avoid all new launches. It means approach them with eyes wide open. Do deeper due diligence on vesting schedules, actual product readiness, and realistic valuation comparisons.
Historical Context: How Unusual Is This?
Looking back at previous cycles, post-TGE dumps aren’t entirely new. 2021 had its share of projects that pumped then dumped. But the scale in 2025 feels amplified.
Part of it might be the sheer volume of launches after years of building during the bear market. Pent-up supply finally hitting exchanges all at once. Combined with higher interest rates and macro uncertainty earlier in the year, liquidity might have been thinner than expected.
Another factor: the market’s growing efficiency. Information spreads faster, arbitrage happens quicker, and sentiment shifts on a dime. What used to take weeks to play out now happens in days.
What Could Change the Trend?
Looking ahead, several things could potentially improve post-TGE performance. More conservative launch valuations would help tremendously. Projects starting with mid-eight or low-nine figure FDVs might have better odds of appreciation.
Stronger focus on bootstrapped growth and real utility before heavy token sales could rebuild trust. Longer vesting for teams and investors would align incentives better. And of course, a sustained bull market with genuine capital inflows never hurts.
Regulatory clarity might also play a role. As frameworks solidify in major jurisdictions, institutional money could flow more confidently into newer projects rather than just Bitcoin and Ethereum.
- Lower, more realistic launch valuations
- Extended vesting schedules for insiders
- Emphasis on product delivery pre-TGE
- Increased institutional participation
- Broader market uptrend with real adoption
These aren’t guarantees, but they’re directions that could shift the odds back toward positive post-launch performance.
Lessons for Crypto Investors
If there’s one takeaway from 2025’s TGE carnage, it’s the importance of patience and skepticism. The days of blindly buying launches because of VC names or hype tweets seem to be fading.
Instead, consider waiting for projects to prove themselves post-launch. Watch on-chain metrics, user growth, developer activity. Let the initial volatility shake out weak hands before committing serious capital.
Diversification still matters too. Spreading risk across established coins and carefully selected newer projects can help weather these kinds of storms. And always, always size positions appropriately—crypto remains high-risk.
In my experience, the best opportunities often come months after launch when the noise dies down and real value (or lack thereof) becomes clear. Sometimes the biggest gains are in tokens that survive the initial bloodbath and quietly build.
Final Thoughts: A Maturing Market?
Despite the pain, I actually see this trend as a sign of crypto maturing. The market is punishing overvaluation and rewarding genuine progress more ruthlessly than before.
It hurts now, especially for those who bought at peaks. But long-term, it could lead to healthier projects, more sustainable growth, and better alignment between teams and communities.
2025 might go down as the year the crypto market grew up a bit. Painful lessons, but necessary ones. The projects that emerge stronger from this environment could be the real foundations for the next wave of adoption.
Whatever your strategy, stay informed, manage risk, and remember why you got into crypto in the first place. The space is still young, still evolving, and still full of potential—just maybe with fewer guaranteed moonshots at launch these days.
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