Quick Takeaways
- Over 80% of 2025 tokens set up trades below their list price.
- Crypto IPO funding hit $14.6 billion, while M&A outmatched $42.5 billion.
- Analysts enjoin cap is spread out into mold crypto equity, not leaving the sector.
Investor capital is rotating from tokens into crypto equities. New research from DWF Labs highlights a sharp divergence. According to Memento Research data cited by DWF, more than 80% of 2025 nominal launches now have merchandise below their token multiplication result price.
Typical drawdowns orbit between 50% and 70% within 90 days of listing. That normal suggests retail buyers often face other losses. DWF Labs cope partner Andrei Grachev said the trend reflects morphological helplessness. He argued the traffic pattern extends beyond short-term volatility.
Most tokens are created within the maiden month after the name. Cost then declines as trade force per unit area increases. “TGE price is the exchange-listed gap price, ” Grachev explained. “We can measure former volatility from that baseline. ”
The findings suggest launching mechanics may favor early participants. Public buyers often enter after initial upside fades.
IPO Funding and M&A Activity Surge in Crypto Sector
While tokens struggle, crypto-related equity markets are booming. IPO funding reached $14.6 billion in 2025. That figure represents a dramatic increase from the prior year. Meanwhile, the crypto sector M&A surpassed $42.5 billion.
The M&A total marks the highest level in five years. Grachev described the shift as a rotation rather than an exit. “If capital were leaving crypto, IPO raises would not jump 48 times year over year,” he said.
He also noted that equity performance now outpaces token performance. Investors appear to favor regulated structures. DWF compared listed firms such as Circle, Gemini, eToro, Bullish, and Figure with tokenized projects.
Public equities traded at price-to-sales multiples between seven and forty times. Comparable tokens ranged between two and sixteen times. The valuation gap suggests institutional demand favors equity exposure.
Institutional Constraints Drive Equity Preference
DWF argues accessibility drives the valuation divide. Many pension funds and endowments cannot hold tokens directly. Institutional mandates often restrict investments to regulated securities markets. Public shares fit within those rules.
Equities also qualify for index inclusion and exchange-traded funds. Passive funds then generate automatic buying flows. Maksym Sakharov, CEO of WeFi, described the trend as a demand for cleaner ownership. Investors want enforceable rights and clearer disclosure.
“When risk appetite tightens, capital seeks structure,” Sakharov said. He emphasized governance and reporting standards. Public companies provide audited financials and shareholder protections. Tokens rarely offer equivalent safeguards.
Holding tokens may also require custody approvals and compliance changes. Equities present fewer operational barriers. The “equity wrapper” aligns with licensing and partnerships. It also supports distribution through traditional financial channels.
Tokens Face Structural Challenges After Launch
Sakharov noted that markets now separate tokens from businesses. A token alone cannot replace product-market fit. Projects must generate steady users, transaction volume, and revenue. Without those metrics, valuations depend on expectations.
That dynamic explains why many token launches surge early. Initial excitement often fades once fundamentals emerge. Grachev described the bifurcation as permanent. Institutional capital increasingly prefers equity rails.
Tokens will still play roles in governance and incentives. However, speculative launches face a tougher climate. Serious protocols with sustainable revenue may survive. The broader long tail could struggle to attract capital.
The data suggests a maturing market. Investors are demanding measurable performance. Crypto equities offer clearer cash flow visibility. Tokens often rely on network growth assumptions.
As capital rotates, founders may reconsider funding strategies. Equity financing could become more attractive than token issuance. The broader message remains clear. Capital is not leaving crypto.
Instead, it is reallocating toward structures that offer transparency and enforceable rights. That rotation may define the next cycle. Institutional discipline is reshaping how investors approach digital assets.
For now, token issuers face higher expectations. Equity markets are capturing the inflows.