Shift in Crypto Market Dynamics: 2025 Token Launches Struggle

The crypto market is experiencing a significant shift as venture capital VC returns decline and new fund creation hits a five-year low. Approximately 85 of tokens launched in 2025 are trading below their debut prices, even those backed by top-tier VC firms.
This contrasts sharply with Q2 2022 when crypto VCs raised nearly 17 billion across over 80 new funds. Institutional investors were eager to back projects with minimal requirements. However, VC return on investment has been steadily declining since then, with the number of new crypto funds dropping significantly.
Despite a reported 84 increase in VC investment last quarter, analysts indicate that this capital was largely raised during the 2022 boom. The total capital deployed between 2023 and 2025 is comparable to what was raised in 2022 alone.
There may be a silver lining to this downturn. As easy VC funding diminishes, projects are being compelled to focus on product-market fit, user growth, and sustainable revenue rather than token hype. Reduced insider influence could lead to fewer aggressive token unlocks and better alignment between builders and communities.