Crypto insiders stopped buying new tokens 2 years ago, creating a liquidity trap that’s crushing retail buyers

Over 80% of tokens launched in 2025 are trading below their initial valuation, with the median token down 71%, indicating that price discovery is happening before the Token Generation Event (TGE). This poor performance is linked to the "low float, high FDV" model, where hyped projects with massive implied valuations suffer severe drawdowns as retail buyers are left holding the bag while insiders' locked tokens vest. A major factor is the liquidity vacuum: institutional funds, like liquid hedge funds, have not bought new tokens at TGE in over two years, preferring regulated Bitcoin and Ethereum ETFs. This absence of institutional bids means initial selling pressure from airdrop recipients crushes prices. Experts criticize the current venture model as extractive, prioritizing quick fundraising over sustainable value creation. Moving forward, issuers must anchor valuations to actual fees and increase initial token floats to deepen liquidity, while investors are advised to treat TGEs like earnings reports and wait for post-airdrop retracements before buying.

(Source：CryptoSlate)