Investment Money Shifts From Digital Tokens to Equity Markets Amid Launch Failures: DWF
Over 80% of token launches in 2025 now trade beneath their initial listing prices, while cryptocurrency sector IPO funding and mergers climb dramatically, indicating investor preference for traditional equity positions.
Capital from investors is moving away from cryptocurrency tokens and toward publicly traded digital asset companies as newly launched tokens face significant challenges, based on research and analysis published by market maker DWF Labs.
Citing data from Memento Research that examined hundreds of token debuts on both major centralized platforms and decentralized exchanges, the firm reported that over 80% of these projects have dropped beneath their token generation event (TGE) price. Standard price declines typically fall within a 50% to 70% range approximately 90 days following their listing, indicating that retail buyers frequently experience immediate financial losses shortly after a token's debut.
Andrei Grachev, managing partner at DWF Labs, explained to Cointelegraph that these numbers demonstrate a recurring pattern following listings rather than temporary market fluctuations. According to him, the majority of tokens achieve their highest price point during the initial month before entering a downward trajectory as selling pressure intensifies.
TGE price is the exchange-listed price set before launch. This is the price the token is set to open at on the exchange, so we can see how much the price actually changes due to volatility in the first few days.
Andrei Grachev, DWF Labs managing partner
The research concentrated on organized token launches connected to projects featuring actual products or protocols, excluding memecoins from the analysis. Token airdrops and the unlocking of early investor allocations were pinpointed as primary contributors to downward selling pressure.
Cryptocurrency IPOs, M&A activity climb as investment capital pivots away from tokens
By comparison, capital formation has gained momentum in traditional financial markets connected to the cryptocurrency sector. Funding raised through crypto-related initial public offerings (IPOs) hit approximately $14.6 billion in 2025, representing a substantial increase from the previous year's figures, while merger and acquisition (M&A) transaction volume exceeded $42.5 billion, marking the highest level recorded in five years.
According to Grachev, this transition should be viewed as capital rotation rather than an exit from cryptocurrency markets entirely. If capital were simply leaving crypto, you wouldn't see IPO raises jump 48x year-over-year to $14.6 billion, M&A hit a 5-year high of over $42.5 billion, and crypto equity performance outpacing token performance, he said.
Within its research report, DWF conducted a comparison of publicly traded companies including Circle, Gemini, eToro, Bullish and Figure against tokenized projects by examining trailing 12-month price-to-sales ratios. Publicly listed equities demonstrated trading multiples ranging from approximately 7 to 40 times sales, while comparable tokens showed multiples between 2 and 16 times.
The company contended that this disparity in valuations stems from differences in accessibility. Numerous institutional investment firms, including pension fund managers and university endowments, face restrictions that limit them to regulated securities exchanges. Additionally, public equity shares can be incorporated into market indexes and exchange-traded funds, generating automatic purchasing activity from passive investment vehicles.
Maksym Sakharov, co-founder and group CEO of WeFi, additionally verified to Cointelegraph that a rotation of capital away from token launches has been occurring.
When risk appetite tightens, investors don't stop craving exposure, so they start demanding cleaner ownership, clearer disclosure, and a path to enforceable rights.
Maksym Sakharov, WeFi co-founder and group CEO
Sakharov further elaborated that investment capital is flowing toward businesses resembling infrastructure due to their focus on custody, payments, settlement, brokerage, compliance and plumbing. He observed that the "equity wrapper" proves attractive because it corresponds with real-world adoption, facilitating licensing, audits, partnerships and distribution channels.
Why investors favor crypto equities over tokens?
The marketplace is progressively treating tokens and actual businesses as distinct entities, Sakharov explained, emphasizing that a token by itself cannot substitute for distribution networks or a functional product. When a project cannot generate consistent users, fees, transaction volume and retention, the token becomes valued on future expectations rather than genuine activity, which explains why numerous launches appear successful initially but subsequently fail to meet expectations.
Publicly listed crypto equities aren't necessarily safer investments, but they provide greater clarity and are simpler for investors to assess, based on Sakharov's perspective. Publicly traded companies deliver reporting standards, governance frameworks and legal claims, and they conform to institutional portfolio requirements, while token holdings frequently require custody approvals and policy modifications.
Grachev characterized this transition as a structural change rather than a cyclical phenomenon. Although tokens will continue to serve essential functions within crypto networks for incentive mechanisms and governance purposes, he stated that institutional capital is increasingly gravitating toward equity investment channels.
Tokens won't disappear, but we're seeing a permanent bifurcation: serious protocols with real revenue will thrive, while the long tail of speculative launches faces a much harder environment.
Andrei Grachev, DWF Labs managing partner