Data from more than 120 token launches shows that early sell pressure, not market timing, largely determined whether new tokens thrived in 2025.
New tokens struggled to find a floor in 2025, with early trading dynamics often setting a trajectory that proved hard to reverse as the year wore on, data shows.
An 80-page analysis by Arrakis Finance found that about 85% of tokens launched last year finished below their initial price, after reviewing 125 token generation events (TGE) and surveying more than 25 founding teams.
The data also shows that nearly two-thirds of tokens were already down within the first seven days, and only 9.4% of tokens that declined in the first week after TGE ever recovered to their launch price at any point later in the year. In most cases, early drawdowns deepened rather than reversed.
Airdrops were one of the strongest sources of immediate selling. Across multiple launches, Arrakis observed that up to 80% of airdrop recipients sold their positions on the very first day of TGE, creating concentrated sell pressure.
“The baseline assumption should be that most of an airdrop will be sold; recipients have zero cost basis and expect prices to decline, making immediate selling rational,” the report states.
Market-making structures also mattered. Arrakis says liquidity was often mispriced, prompting traders to take quick exits.
“Liquidity depth is your buyer against sell pressure. Depth needs to absorb selling from airdrops, exchange allocations, and market maker loans without catastrophic price impact,” the report notes.
Arrakis concludes that token outcomes in 2025 were largely decided by launch mechanics rather than market cycles. Early supply shocks, not macro conditions, determined whether tokens stabilized or slid, and once early confidence was lost, recovery was statistically rare.
That finding broadly aligns with separate research from Dragonfly Capital, which recently found little difference in long-term performance between tokens launched in bull versus bear markets.
As Dragonfly Capital managing partner Haseeb Qureshi explained, regardless of the timing, most tokens don’t perform well over time. Bull market launches recorded a median annualized return of about 1.3%, while bear-market launches came in at -1.3%.
