2025 New Coin Collapse: Why 90% of tokens fell over 70%, How the market will restart

2025 will be a disastrous year for the new token market. According to statistics from Memento Research tracking 118 token issuance events, nearly 85% of new coins are now trading below their initial valuation, with median token losses exceeding 70%. This phenomenon signals a profound crisis in the issuance logic of the crypto market—once market hotspots, new tokens have now become risk traps.

In stark contrast to the prosperity of 2021, when new tokens like MATIC, FTM, AVAX soared amid enthusiastic market sentiment, the story in 2025 is entirely different: new tokens are sold off immediately upon launch, and new listings on exchanges serve as a bearish signal.

Nine out of ten new tokens have fallen more than 70%, market difficulties evidenced by data

Since early 2025, a brutal pattern has been established: the more a new token is promoted, the higher its probability of decline. This ongoing dilemma has persisted throughout the year, especially for tokens listed on major centralized exchanges like Binance, which often face massive sell-offs on their first day.

The long-term weakness of the altcoin market is a key driver. Since the meme coin bubble burst in February, the entire altcoin sector has been in decline, with only a brief rebound in September. Meanwhile, Bitcoin continues to dominate market trends, absorbing large amounts of speculative capital. This has led market participants to adopt a single strategy: quickly arbitrage on the first day of a new token’s listing, then immediately shift focus to BTC.

Even well-funded, highly anticipated projects are not immune to initial selling pressure. Plasma (XPL) is a typical example—launched in September, it briefly reached a high of $2.00, but has now fallen to $0.10, a decline of nearly 95%. Monad, since its token launch in November, has also fallen approximately 40%. These are not small projects; they are new tokens with a certain level of market recognition.

Distributive mechanisms out of control: why large-scale airdrops have become nightmares

The root cause of the new token dilemma lies in its distribution logic. The distribution schemes designed by large exchanges and platforms aim to expand coverage and liquidity. However, the result is that many exchanges flood the market with supply through large-scale airdrops and direct sales platforms, most of which are received by recipients with no relation to the project.

This approach completely changes the composition of token holders. In previous cycles, token supporters were usually active in Discord communities, passionate about the project. In 2025, the situation is different: exchanges hold large supplies, which are then distributed via airdrops or batch sales into the market, ultimately falling into the hands of traders who focus on price volatility rather than product utility.

This does not imply traders are at fault, but it does indicate that the incentive mechanisms are thoroughly misaligned. Once large-scale supply begins circulating in the market, projects almost cannot regain narrative control. For years, industry assumptions held that “early liquidity would eventually convert into long-term value,” but this hypothesis has completely shattered in 2025.

Useless new tokens are doomed to fail: lack of genuine value propositions

Another unspoken issue is that many new tokens lack sufficient use cases. To maintain value, tokens must become core to the product—users depend on them, not just treat them as trading assets. This means value should be driven by actual usage needs, not marketing hype.

In reality, many teams rush to issue tokens before their applications are mature, expecting community and utility to follow. In a market environment that prioritizes price, this “issue first, build ecosystem later” approach has proven ineffective.

This was less problematic during the ICO frenzy of 2017, when the novelty of ICOs and the booming altcoin market masked fundamental flaws. But by 2025, altcoins generally perform poorly, and the dominant strategy has shifted to “quick profits from new tokens, then return to BTC.” In such an environment, vague value propositions become a fatal weakness.

Regulatory uncertainty and conservative design paradox

Project design is also influenced by the policy direction in Washington. According to Mike Dudas, partner at 6MV Venture Capital, the stagnation of the US Market Structure Act in 2025 leaves unresolved whether tokens can confer rights similar to equity.

In an uncertain regulatory environment, many teams opt for conservative designs—issuing tokens with minimal functionality, almost no claims beyond trading. This cautious approach aims to avoid regulatory risks but ends up stripping away the core value support of the token. While seeking legal safety, projects also lose the opportunity to provide holders with clear, sustainable value.

The market is seeking new issuance paradigms

If 2025 has exposed what doesn’t work, it has also clarified the future direction of the market. Dudas and other industry insiders emphasize that large-scale distribution led by exchanges often hinders rather than promotes long-term success. Binance’s listings, in particular, serve as a reverse signal—many new tokens depreciate almost instantly after listing.

The problem is structural: large CEX distribution schemes, widespread airdrops, and direct sales platforms prioritize liquidity and trading volume over genuine alignment between holders and projects. Once large supplies reach traders who do not use the product, sustained selling pressure becomes inevitable.

In response, more teams are beginning to experiment with driven distribution models—tokens obtained through actual participation rather than initial allocation, ensuring tokens go to users who rely on the product. This may involve rewards linked to transaction fees, minimum activity thresholds, infrastructure maintenance, or governance participation—regardless of the specific method, the goal is to allocate tokens to users with real demand. Although slower and more complex to implement, this approach is increasingly seen as a necessary evolution as traditional CEX airdrop models fail.

New tokens need repositioning: alignment is the key to survival

Lessons from 2025 show that the problem is not with tokens themselves but with misaligned tokens doomed to fail in a ruthless market. Data from Memento Research clearly confirms this.

Most new tokens lose value not because demand for crypto disappears, but because issuance, ownership, and utility are severely disconnected. These tokens are often liquidated too early (before the product is mature), held too broadly (community not yet formed), or traded too actively (speculated before delivering real utility).

The next phase of the market is unlikely to reward hype and narratives. Instead, it will favor restraint, more sophisticated incentive designs, and new tokens whose value is directly linked to real usage. Projects that can emerge from the 2025 crash will be those that understand—deep value comes from product alignment, not trading activity.