The crypto market is experiencing a significant capital shift from tokens to publicly listed companies, as new token launches struggle to maintain their value, according to a report from market maker DWF Labs. The firm, drawing on Memento Research data, found that over 80% of token projects have fallen below their token generation event (TGE) price, with typical drawdowns ranging from 50% to 70% within 90 days of listing.
Post-Listing Trends and Investor Sentiment
DWF Labs managing partner Andrei Grachev told Cointelegraph that the consistent post-listing pattern is a result of structural market dynamics, not just short-term volatility. “Most tokens reach a price peak within the first month and then trend downward as selling pressure builds,” Grachev explained. He noted that the TGE price is the exchange-listed price set before the launch, which often serves as a benchmark for initial performance.
Capital Rotation into Traditional Markets
In contrast to the struggles of token launches, capital formation has strengthened in traditional markets tied to the crypto sector. Fundraising for crypto-related initial public offerings (IPOs) reached about $14.6 billion in 2025, a sharp increase from the previous year. Merger and acquisition (M&A) activity also hit a five-year high of over $42.5 billion.
“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,”
Grachev emphasized that this shift should be viewed as a rotation rather than a withdrawal of capital. The analysis by DWF Labs compared listed companies such as Circle, Gemini, eToro, Bullish, and Figure with tokenized projects using trailing 12-month price-to-sales ratios. Public equities traded at multiples between 7 and 40 times sales, while comparable tokens ranged from 2 to 16 times.
Valuation Gap and Institutional Preferences
The valuation gap is driven by accessibility and regulatory compliance. Many institutional investors, including pension funds and endowments, are restricted to regulated securities markets. Public shares can also be included in indexes and exchange-traded funds, creating automatic buying from passive investment products.
Maksym Sakharov, co-founder and group CEO of WeFi, confirmed the capital rotation, noting that investors are seeking cleaner ownership, clearer disclosure, and a path to enforceable rights. “When risk appetite tightens, investors don’t stop craving exposure, so they start demanding more regulated and transparent investment vehicles,” Sakharov said.
Why Investors Favor Crypto Equities
The market is increasingly treating tokens and businesses as separate entities. Sakharov noted that a token alone cannot replace distribution or a working product. If a project fails to generate steady users, fees, transaction volume, and retention, the token ends up priced on expectations rather than real activity, leading to initial success followed by disappointment.
While listed crypto equities are not necessarily safer, they are clearer and easier for investors to evaluate. Public companies offer reporting standards, governance, and legal claims, and they fit within institutional portfolio rules. Holding tokens, on the other hand, often requires custody approvals and policy changes.
Structural Shift in the Market
Grachev described this shift as structural rather than cyclical. While tokens will remain part of crypto networks for incentives and governance, institutional capital increasingly prefers equity rails. “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,” he concluded.
This structural shift highlights the maturation of the crypto market, where the focus is moving from speculative token launches to sustainable, regulated investment opportunities. As the market continues to evolve, the integration of crypto into traditional financial frameworks will likely become more prevalent, offering a more stable and accessible investment landscape for both institutional and retail investors.
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