For much of 2025, a simple rule held true: if a new token came to market, its price would likely drop.
Data from Memento Research, which tracked 118 token generation events last year, shows that around 85% are now trading below their initial valuation. The median token is down more than 70% from where it started.
This stands in stark contrast to the previous bull cycle of 2021, when a number of top tokens – including MATIC, FTM and AVAX – surged post-launch, buoyed by a frothy altcoin market and insatiable risk appetite.
A difficult year to be new
The weakness appeared early and persisted throughout 2025. Tokens that debuted on major centralized exchanges, including Binance, often sold out almost immediately. Instead of signaling momentum, stock market listings have increasingly become a warning sign.
Several factors contributed to the underperformance. The altcoin market remained depressed for much of the year after the memecoin bubble burst in February, aside from a brief recovery in September. Bitcoin continued to outperform, leaving little room for speculative rotation into new tokens.
This environment has shaped the behavior of traders. Rather than committing to long-term positions, many have chosen to take quick profits and look elsewhere, not wanting to be the last holder in a falling market.
Teams that expected tokens to help bootstrap ecosystems found themselves defending charts that only moved in one direction. Even large, well-capitalized projects have had difficulty escaping early sales pressures. Plasma for example, is now trading below $0.20 after reaching $2.00 during its September debut. Monad, meanwhile, has lost around 40% of its value since its token went live in November.
Too many supports, too little alignment
A major problem was who ended up owning these tokens.
Large exchange distribution programs, large airdrops, and direct sales platforms have done what they were designed to do: maximize reach and liquidity. But they also flooded the market with holders with little connection to the underlying product.
This dynamic marked a shift from previous cycles, when tightly knit communities formed within Discord groups around token launches and trading lists. By 2025, exchanges and distribution platforms often held significant shares of the supply, which were then dumped or sold in waves. Many tokens quickly found themselves outside of their intended ecosystems, held by traders focused on short-term price movements rather than their use.
This does not make these traders bad guys. It just means their incentives are different. And once that supply starts circulating, it becomes difficult for a project to regain control of its narrative.
For years, the industry assumed that upfront cash would eventually translate into long-term value. By 2025, this assumption has collapsed.
Tokens without a clear objective
Another uncomfortable truth is that many tokens simply didn’t have enough to do.
For a token to have value, it must be at the heart of the product – something users rely on, not just something they trade. In practice, this means demand driven by usage rather than marketing.
Instead, many teams issued tokens before these conditions existed, in the hopes that utility and community would follow. In a market increasingly obsessed with price, this gap has proven fatal.
This was less of an issue during the 2017 initial coin offering (ICO) cycle, when many tokens launched with little more than whitepapers. The novelty of the ICO model and a largely bullish altcoin market have made the fundamentals easier to ignore. In 2025, when altcoins were significantly underperforming bitcoin, the dominant strategy was to extract short-term gains from new tokens and return to BTC.
Regulation still casts a shadow
Design choices were also shaped by what didn’t happen in Washington.
Mike Dudas, managing partner at venture capital firm 6MV, told CoinDesk that the failure to pass a US market structure bill in 2025 left it unclear whether tokens could carry stock-like rights. Without this clarity, teams avoided features that might attract regulatory scrutiny.
The result was a wave of conservative, pared-down tokens – tradable assets with few explicit claims about value. In trying to avoid any legal risk, many issuers have also avoided giving holders a clear long-term reason to own the token.
What comes next
If 2025 has revealed what’s not working, it’s also clarified what many teams are now turning to.
A recurring theme, highlighted by Dudas, is that exchange-based distribution often works against long-term success. Binance listings in particular have become a bearish signal, with many newly listed tokens selling off almost immediately.
The problem is structural. Large CEX allocation programs, airdrops, and direct sales platforms optimize for liquidity and volume, not alignment. When significant portions of the offering are entrusted to merchants who will probably never use the product, selling pressure becomes inevitable.
In response, more teams could begin experimenting with usage-based distribution models, in which tokens are earned through demonstrated engagement rather than distributed widely at launch, an approach taken in the past by companies like Optimism and Blur. This could involve tying rewards to paying fees, meeting minimum activity thresholds, managing infrastructure, or participating in governance – ensuring that tokens go to users who actually rely on the product.
The approach is slower and more difficult to implement, but is increasingly seen as necessary as the overall CEX airdrop model loses credibility.
A reset needed
What we need to remember about 2025 is not that the chips are down. The problem is that misaligned tokens do not survive unforgiving markets.
Data from Memento Research clearly shows this. Most new tokens lost value, not because demand for cryptocurrency disappeared, but because issuance, ownership, and utility were out of sync. Tokens became liquid before they were needed, widely held before communities formed, and actively traded before playing a significant role in the product.
The next phase of the market is unlikely to reward marketing buzz. Instead, it will promote restraint, clearer incentive design, and tokens whose value is tied to actual usage – not just when they start trading.
