For much of 2025, a simple rule remained: if a new token hit the market, its price would likely drop.
Data from Memento Research, which tracked 118 token generation events last year, shows that about 85% are now trading below their initial valuations. The average token is down over 70% from where it started.
This is in stark contrast to the previous bull cycle in 2021, when several high-profile tokens including MATIC, FTM, and AVAX surged after their launch, fueled by a frothy altcoin market and an insatiable risk appetite.
A difficult year to be new.
Weakness appeared early and persisted throughout 2025. Tokens that debuted on major centralized exchanges, including Binance, often sold off almost immediately. Instead of indicating momentum, stock prices increasingly became a warning sign.
Several factors contributed to the poor performance. The altcoin market remained depressed for much of the year after the memecoin bubble burst in February, apart from a brief rally in September. Bitcoin continued to outperform, leaving little room for speculative rotation into new tokens.
That environment shaped the behavior of traders. Instead of committing to long-term positions, many opted to take quick profits and rotate elsewhere, not wanting to be the last holder in a falling market.
Teams hoping tokens would help drive ecosystems found themselves defending charts that only moved in one direction. Even well-capitalized, high-profile projects struggled to escape early selling pressure. Plasma For example, it is now trading below $0.20 after reaching $2.00 during its debut in September. Meanwhile, Monad has lost approximately 40% of its value since its token went live in November.
Too many starters, too little lineup
An important question was who ended up owning these tokens.
Large currency distribution programs, extensive airdrops, and direct sales platforms did what they were designed to do: maximize reach and liquidity. But they also flooded the market with holders that had little connection to the underlying product.
That dynamic marked a shift from previous cycles, when tight-knit communities formed in Discord groups around token launches and exchange listings. In 2025, exchanges and distribution platforms often held significant portions of the supply, which were then airdropped or sold in waves. Many tokens quickly ended up outside their intended ecosystems, in the hands of traders focused on short-term price movements rather than usage.
That doesn’t make those merchants villains. It just means that your incentives are different. And once that offer starts circulating, it’s difficult for a project to regain control of its narrative.
For years, the industry assumed that early liquidity would eventually translate into long-term value. In 2025, that assumption was broken.
Tokens without a clear purpose
Another inconvenient truth is that many tokens simply didn’t have enough to do.
For a token to have value, it must be core to the product: something users trust, not just something they trade. In practice, that means demand driven by usage rather than marketing.
Instead, many teams issued tokens before those conditions existed, hoping that utility and community would follow. In a market increasingly obsessed with price, that gap proved 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 broadly bullish altcoin market made the fundamentals easier to ignore. In 2025, when altcoins were significantly underperforming Bitcoin, the dominant strategy became extracting short-term profits from new tokens and rotating back into BTC.
Regulation still casts a shadow
Design choices were also determined 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 unresolved whether tokens can have rights similar to stocks. Without that clarity, teams avoided features that could attract regulatory scrutiny.
The result was a wave of cautious, simplified tokens: tradable assets with few explicit rights to their value. In trying to avoid legal risk, many issuers also avoided giving holders a clear long-term reason to own the token.
What comes next?
If 2025 exposed what isn’t working, it also clarified what many teams are looking at now.
A recurring theme, highlighted by Dudas, is that sharing-driven distribution often worked against long-term success. Binance quotes in particular became a bearish signal, with many newly listed tokens selling off almost immediately.
The problem is structural. Large CEX allocation programs, airdrops, and direct selling platforms optimize liquidity and volume, not alignment. When significant portions of the supply are given to merchants who are unlikely to ever use the product, selling pressure becomes inevitable.
In response, more teams may begin experimenting with usage-based distribution models, where tokens are earned through demonstrated commitment rather than being given out widely at launch, an approach taken in the past by companies like Optimism and Blur. That may mean tying rewards to fee payments, meeting minimum activity thresholds, running infrastructure, or participating in governance, ensuring tokens accumulate for users who truly trust the product.
The approach is slower and more difficult to execute, but is seen as increasingly necessary as the CEX’s overall airdrop model loses credibility.
A necessary reboot
The bottom line for 2025 is not that the chips are broken. It’s just that misaligned tokens don’t survive unforgiving markets.
Memento Research data makes this clear. Most new tokens lost value not because demand for cryptocurrencies disappeared, but because issuance, ownership, and utility were out of sync. Tokens became liquid before they were needed, were held widely before communities were formed, and were actively traded before they played a significant role in the product.
The next phase of the market is unlikely to reward marketing rumors. Instead, it will favor moderation, a clearer incentive design, and tokens whose value is tied to actual use, not just the moment they begin trading.
