Investor Capital Shifts from Tokens to Public Crypto Companies
By John Nada·Feb 22, 2026·7 min read
A shift in investor capital is noted as funds move from struggling token launches to publicly listed crypto firms. This trend signals a broader structural change in the market.
Investor capital is increasingly flowing from tokens into publicly listed crypto companies as new token launches struggle, according to research from market maker DWF Labs. Drawing on Memento Research data covering hundreds of token launches across major centralized and decentralized exchanges, the firm stated that more than 80% of projects have fallen below their token generation event (TGE) price. Typical drawdowns range between 50% and 70% within roughly 90 days of listing, suggesting public buyers often face immediate losses after launch. This trend indicates a significant challenge for new projects entering the market, as they must overcome the initial selling pressure that often follows their debut.
DWF Labs managing partner Andrei Grachev explained that these figures reflect a consistent post-listing pattern rather than short-term market volatility. He noted that most tokens reach a price peak within the first month and then trend downward as selling pressure builds. "TGE price is the exchange-listed price set before launch," Grachev said. "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," he added. This established pattern illustrates the challenges new tokens face in maintaining value once they enter the market.
The analysis conducted by DWF Labs focused on structured launches tied to projects with real products or protocols, rather than purely speculative tokens or memecoins. Among the major sources of selling pressure identified were airdrops and early investor unlocks, which exacerbate the decline in value following the initial listing. This phenomenon underscores the high risk associated with investing in newly launched tokens, as early investors may sell their holdings to realize profits, contributing to a cycle of price depreciation.
In stark contrast, capital formation has strengthened in traditional markets related to the crypto sector. Fundraising for crypto-related initial public offerings (IPOs) surged to about $14.6 billion in 2025, a significant increase from the previous year, while merger and acquisition activity surpassed $42.5 billion—the highest level in five years. Grachev emphasized that this shift should be viewed as a rotation rather than a withdrawal of capital. He stated, "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." This highlights a robust interest in established crypto firms that offer more stability compared to the volatile nature of token launches.
DWF's report illustrates that public equities, such as those from firms like Circle, Gemini, and eToro, are trading at multiples significantly higher than those of comparable tokens. Public companies are valued at price-to-sales ratios between roughly 7 and 40 times, compared to 2 to 16 times for tokens. This valuation gap is largely driven by accessibility issues; many institutional investors are limited to regulated securities markets, thus favoring public shares that can be included in indices and exchange-traded funds. The ability to include these equities in passive investment products further enhances their appeal, as institutional investors seek stable, regulated investments.
Maksym Sakharov, co-founder and group CEO of WeFi, echoed these findings, noting a clear demand for businesses resembling infrastructure due to their enhanced transparency and credibility. When investors' risk appetites tighten, they seek clearer ownership structures and enforceable rights, which public companies can offer more readily than tokens. Sakharov pointed out that the money is flowing toward businesses that embody infrastructure, citing the importance of custody, payments, settlement, brokerage, compliance, and plumbing. He noted that the "equity wrapper" is attractive because it aligns with real-world adoption, enabling licensing, audits, partnerships, and distribution channels. This transition toward equity reflects a broader trend in investor preferences, favoring more secure and structured investment opportunities.
The market is increasingly treating tokens and businesses as separate entities, Sakharov emphasized. He stated that a token alone cannot replace the need for a working product or distribution. If a project fails to generate steady users, fees, transaction volume, and retention, its token ends up priced on expectations rather than real activity. This disconnect has led to many initial launches looking successful at first but ultimately disappointing investors. The contrast between the speculative nature of tokens and the more grounded prospects of established companies is becoming clearer, prompting investors to reassess their strategies.
While listed crypto equities are not necessarily devoid of risk, they are clearer and easier for investors to evaluate, according to Sakharov. Public companies offer established reporting standards, governance frameworks, and legal claims, fitting within institutional portfolio rules. In contrast, holding tokens often requires custody approvals and policy changes, making them less attractive to institutional players. Grachev characterized this trend as structural rather than cyclical, indicating a fundamental shift in the nature of investment in the crypto space.
Tokens will still play a role within crypto networks for governance and incentives, but the growing preference for equity indicates a bifurcation in the market. Serious protocols that can demonstrate real revenue are likely to thrive, while the long tail of speculative launches may struggle in an increasingly discerning environment. This evolution marks a significant shift in how capital is allocated within the crypto space, with lasting implications for both investors and the future of blockchain projects.
The implications of this shift extend beyond mere investment strategies; they suggest a maturation of the crypto market as a whole. The movement from speculative tokens towards established public companies indicates that investors are beginning to prioritize sustainability and real-world applications over hype and speculation. This trend could lead to a more stable investment landscape, where businesses that demonstrate value and utility are rewarded in the marketplace, fostering an environment conducive to innovation and growth.
Furthermore, the rise of public crypto companies may encourage greater regulatory scrutiny and engagement, as these firms are subject to the same standards as traditional public companies. This could lead to improved compliance and governance across the board, benefiting the entire industry by fostering investor confidence and attracting more institutional capital.
As the market continues to evolve, it will be essential for stakeholders to remain agile and responsive to these changes. The focus on equity and established projects may also drive innovation in the way tokens are utilized within ecosystems, perhaps leading to new models that combine the benefits of both public equity and decentralized tokens. This could pave the way for hybrid models that offer the best of both worlds, appealing to both traditional investors and the crypto-native community.
In this shifting landscape, it's crucial for investors to conduct thorough due diligence and remain informed about the underlying fundamentals of the projects they choose to support. The shift from tokens to public companies may indicate a broader recognition of the importance of sustainable business models and the value of transparency in the cryptocurrency space.
The developments outlined by DWF Labs and industry leaders like Grachev and Sakharov provide a compelling narrative about the future of crypto investment. As capital continues to flow towards publicly traded firms, it will be interesting to observe how this trend influences the development of new projects, the regulatory environment, and the overall perception of cryptocurrencies in the financial landscape. Investors and companies alike must navigate these changes with foresight and adaptability, ensuring they remain aligned with the evolving demands of the market.