For most of 2025, a simple rule applied: if a new token hit the market, the price was likely to drop.
Data from Memento Research, which tracked 118 token generation events last year, shows that around 85% are now trading below their original valuations. The Median token has fallen more than 70% from where it started.
That is in stark contrast to the previous bull cycle of 2021, when a number of high-profile tokens – including MATIC, FTM and AVAX – surged after launch, supported by a frothy altcoin market and insatiable risk appetite.
A tough year to be new
The weakness showed early and persisted throughout 2025. Tokens that debuted on major centralized exchanges, including Binance, often sold off almost immediately. Rather than signaling momentum, IPOs increasingly became a warning sign.
Several factors contributed to the underperformance. The altcoin market remained depressed for most of the year after the memecoin bubble burst in February, except for a brief rebound in September. Bitcoin continued to outperform, leaving little room for speculative rotation into new tokens.
That environment shaped the traders’ behaviour. Rather than commit to long-term positions, many chose to take quick profits and rotate elsewhere, unwilling to be the last holdout in a falling market.
Teams expecting tokens to help bootstrap ecosystems instead found themselves defending charts that only moved one way. Even well-capitalized, high-profile projects struggled to escape early sales pressure. Plasma for example, is now trading below $0.20 after hitting $2.00 during its debut in September. Monad, meanwhile, has lost about 40% of its value since its token went live in November.
Too many holders, too little adjustment
A big issue was who ended up owning these tokens.
Large exchange distribution programs, broad airdrops and direct selling platforms did what they were designed to do: maximize reach and liquidity. But they also flooded the market with holders who had little connection to the underlying product.
This dynamic marked a shift from previous cycles where tight-knit communities formed in Discord groups around token launches and IPOs. By 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, held by traders focused on short-term price movements rather than use.
That does not make the traders villains. It simply means that their incentives are different. And once that supply begins to circulate, it becomes 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 collapsed.
Tokens without a clear purpose
Another uncomfortable truth is that many tokens simply didn’t have enough to do.
For a token to have value, it must be central to the product – something users trust, not just something they trade. In practice, this means demand driven by use rather than marketing.
Instead, many teams issued tokens before these relationships existed, hoping that utility and community would follow. In a market increasingly obsessed with price, the gap proved fatal.
This was less of an issue during 2017’s initial coin offering (ICO) cycle, when many tokens launched with little more than whitepapers. The novelty of the ICO model and a generally bullish altcoin market made it easier to ignore fundamentals. By 2025, when altcoins largely underperformed bitcoin, the dominant strategy became to extract short-term gains from new tokens and rotate back to BTC.
Regulation still casts a shadow
Design choices were also shaped by what wasn’t happening in Washington.
Mike Dudas, managing partner at venture capital firm 6MV, told CoinDesk that the failure to pass a 2025 US market structure bill left unclear whether tokens can carry equity-like rights. Without this clarity, teams avoided features that might attract regulatory scrutiny.
The result was a wave of cautious, stripped-down tokens – tradable assets with few explicit claims to value. In an attempt to avoid legal risk, many issuers also avoided giving holders a clear long-term reason to own the token at all.
What comes next
If 2025 revealed what doesn’t work, it also clarified what many teams are now looking towards.
A recurring theme, highlighted by Dudas, is that exchange-led distribution often worked against long-term success. Binance listings 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 for liquidity and volume, not alignment. When meaningful portions of the supply are handed over to merchants who are unlikely to ever use the product, sales pressure becomes inevitable.
In response, more teams may begin experimenting with usage-based distribution models, where tokens are earned through demonstrated engagement rather than distributed widely at launch, an approach previously adopted by the likes of Optimism and Blur. This could mean tying rewards to the payment of fees, meeting minimum activity thresholds, running infrastructure or participating in governance – ensuring that tokens go to users who actually trust the product.
The approach is slower and more difficult to execute, but is increasingly seen as necessary as the general CEX airdrop model loses credibility.
A necessary reset
The takeaway from 2025 is not that tokens are broken. It’s that misaligned tokens don’t survive unforgiving markets.
Memento Research’s data makes that clear. Most new tokens lost value not because demand for crypto disappeared, but because issuance, ownership and utility were out of sync. Tokens were floated before they were needed, widely held before communities were formed, and actively traded before they played a meaningful role in the product.
The next phase of the market is unlikely to reward marketing buzz. Instead, it will favor restraint, clearer incentive design, and tokens whose value is tied to actual use — not just the moment they start trading.
