Crypto News: Crypto VC Slump Deepens As 85% of 2025 Tokens Sink

Key Insights

• In the latest crypto news, 85% of 2025 tokens traded below launch price
• VC fundraising fell to five-year low levels
• Recent deployments relied on 2022-era capital

Crypto news data showed a sharp reversal in venture-backed token performance in 2025. The DeFi Edge reported on Feb. 17 that 85% of tokens issued this year traded below their launch price. The shift reflected weakening venture capital returns and reduced new fundraising across the sector.

The crypto news cycle once centered on large venture rounds and rapid token listings. That model slowed after 2022 as liquidity tightened and limited partners reduced allocations. Current data suggested the market now prices projects on user traction rather than early capital backing.

Crypto News: Venture Capital Momentum Faded After 2022 Peak

The DeFi Edge data showed venture capital enthusiasm peaked in Q2 2022, when firms raised nearly $17 billion across more than 80 new funds. Limited partners at the time committed capital aggressively as digital asset valuations climbed. That surge created a large funding base that managers later deployed.

Wu Blockchain reported that last quarter’s fundraising equaled just 12% of the Q2 2022 level. New fund formation also fell to a five-year low, indicating weaker appetite from institutional backers. This shift occurred because prior portfolios underperformed, reducing confidence in repeat allocations.

CryptOpus noted that venture capital firms still deployed $8.5 billion in the latest quarter, representing an 84% increase from the previous period. However, managers largely drew from capital raised during the 2022 cycle rather than securing fresh commitments. That reaction mirrored a broader retrenchment in private markets.

Token issuers that once marketed “top VC” backing as a catalyst saw reduced impact in secondary trading. Investors appeared less responsive to brand-name investors, focusing instead on liquidity depth and revenue visibility. The change signaled declining influence of traditional venture narratives within crypto news discussions.

Crypto News: Token Performance Reflected Structural Pressure

The DeFi Edge chart illustrated how the majority of new listings traded below initial pricing benchmarks. Many venture-backed tokens struggled to sustain valuations after exchange listings. Early buyers faced drawdowns soon after public market entry.

Galaxy Research data, referenced in the same thread, showed that venture return on investment declined steadily after 2022. As liquidity contracted, secondary markets absorbed supply without the same retail momentum seen during prior cycles. This imbalance pressured post-launch performance.

Market participants linked weaker outcomes to vesting schedules and token unlock structures. When projects launched with substantial insider allocations, circulating supply expanded rapidly. Retail demand often failed to match that pace, compressing prices.

Crypto news analysts also observed that macro conditions shifted during the same period. Higher global interest rates reduced speculative inflows into alternative assets. Capital rotated toward lower-risk instruments, limiting token demand growth.

That broader backdrop reduced tolerance for aggressive token valuations. Investors increasingly evaluate on-chain revenue, user retention, and treasury transparency. Projects without measurable activity struggled to justify initial pricing multiples.

Builder Incentives Began To Realign

The DeFi Edge commentary argued that the traditional cycle of raising a large round, launching a token, and exiting through secondary liquidity had weakened. As venture dominance receded, teams faced stronger incentives to build sustainable products. That logic suggested a gradual shift in project design priorities.

Some founders responded by delaying token issuance altogether. Others structured launches with lower fully diluted valuations to attract longer-term holders. This recalibration reflected changing expectations in the crypto news environment.

Developers also emphasized revenue-generating protocols rather than speculative narratives. Platforms with clear fee models and transparent dashboards attracted more stable user bases. That focus reduced reliance on short-term price momentum.

The retrenchment in venture funding may narrow the number of new chains entering the market. Instead of proliferating networks, builders increasingly concentrated on product-market fit within existing ecosystems. This approach aligned with capital constraints and investor scrutiny.

Meanwhile, limited partners reassessed their allocation strategies. Many funds concentrate on follow-on investments into existing portfolio companies rather than backing new token launches. That capital discipline altered the dynamics of the early-stage crypto pipeline.

Crypto news data now centers on whether fundraising stabilizes in the next reporting cycle. Market participants will monitor upcoming quarterly venture disclosures for signs of renewed limited partner commitments. If new fund formation remains muted, token launch supply may slow, shifting attention toward protocols that demonstrate sustained user growth rather than headline funding rounds.

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