coindesk.com
For much of 2025, a simple rule held: if a new token hit the market, its price probably went down.
Data from Memento Research, which tracked 118 token generation events last year, shows that roughly 85% are now trading below their initial valuations. The median token is down more than 70% from where it started.
That stands in stark contrast to the previous bull cycle in 2021, when a number of high-profile tokens — including MATIC, FTM and AVAX — surged after launch, buoyed by a frothy altcoin market and insatiable risk appetite.
A rough year to be new
The weakness showed up early and persisted throughout 2025. Tokens that debuted on major centralized exchanges, including Binance, often sold off almost immediately. Instead of signaling momentum, exchange listings increasingly became 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 rally in September. Bitcoin continued to outperform, leaving little room for speculative rotation into new tokens.
That environment shaped trader behavior. Rather than committing to long-term positions, many opted to take quick profits and rotate elsewhere, unwilling to be the last holder in a falling market.
Teams that expected 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 selling pressure. Plasma XPL$0.1915, for example, is now trading below $0.20 after hitting $2.00 during its debut in September. Monad, meanwhile, has lost roughly 40% of its value since its token went live in November.
Too many holders, too little alignment
A major issue was who ended up owning these tokens.
Large exchange distribution programs, broad airdrops and direct-sale 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.
That dynamic marked a shift from earlier cycles, when tightly knit communities formed in Discord groups around token launches and exchange listings. In 2025, exchanges and distribution platforms often held significant portions of 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 moves rather than usage.
That doesn’t make those traders villains. It simply 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 early liquidity would eventually translate into long-term value. In 2025, that assumption broke down.
Tokens without a clear purpose
Another uncomfortable truth is that many tokens simply didn’t have enough to do.
For a token to hold value, it needs to be central to the product — something users rely on, 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 utility and community would follow. In a market increasingly obsessed with price, that gap proved fatal.
This was less of a problem 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 fundamentals easier to ignore. In 2025, with altcoins largely underperforming bitcoin, the dominant strategy became extracting short-term gains from new tokens and rotating back into 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 of a U.S. market structure bill to pass in 2025 left unresolved whether tokens can carry equity-like rights. Without that clarity, teams avoided features that might attract regulatory scrutiny.
The result was a wave of cautious, stripped-down tokens — tradeable assets with few explicit claims on value. In trying 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 exposed what doesn’t work, it also clarified what many teams are now looking toward.
One 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-sale platforms optimize for liquidity and volume, not alignment. When meaningful portions of supply are handed to traders 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 engagement rather than handed out broadly at launch, an approach adopted in the past by the likes of Optimism and Blur. That can mean tying rewards to paying fees, meeting minimum activity thresholds, running infrastructure or participating in governance — ensuring tokens accrue to users who actually rely on the product.
The approach is slower and harder to execute, but increasingly viewed as necessary as the blanket CEX airdrop model loses credibility.
A necessary reset
The takeaway from 2025 isn’t 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 became liquid before they were needed, widely held before communities 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 usage — not just the moment they start trading.