85% of 2025 Crypto Token Launches Are Already Underwater

• 85% of tokens launched in 2025 now trade below launch price, even VC-backed projects fail.
• Last quarter fundraising hit just 12% of Q2 2022, with new fund launches at a five-year low.
• VCs mostly deploy old capital, while projects with real users and revenue gain more attention.

According to crypto analyst Edgy of The DeFi Edge, 85% of token launches in 2025 are already trading below their launch price.

VC-backed projects, long seen as safer bets, are barely breaking even. Some are deep in the red. The old playbook of raising funds, launching a token, and offloading to retail buyers is losing its grip.

Crypto VC Fundraising Has Collapsed Since Its 2022 Peak

The data paints a sharp picture of decline. In Q2 2022, crypto venture capitalists raised nearly $17 billion in a single quarter. Over 80 new funds launched in that period alone. Limited partners poured money into anything pitched with the word “crypto.”

That era is now firmly in the rearview mirror. According to Galaxy Research data shared by The DeFi Edge, VC returns have been falling since 2022. New fund formation just hit a five-year low. Last quarter’s fundraising was only 12% of Q2 2022 levels.

The $8.5 billion deployed last quarter may look impressive at first glance. It was up 84% quarter-over-quarter. But The DeFi Edge points out this is not fresh capital at work.

VCs are spending money raised back in 2022. The total capital deployed from 2023 to 2025 is roughly equal to what the industry raised in that one record quarter alone.

85% of token launches in 2025 are underwater.

VC backed deals barely break even and some are deep in the red.

Back in the day having a “Top VC” on the cap table was a huge catalyst, but not anymore. This chart from Galaxy Research tells the story.

In Q2 2022, crypto VCs… pic.twitter.com/HAdlXAYccA

— Edgy – The DeFi Edge 🗡️ (@thedefiedge) February 17, 2026

What the Fall of VC Power Means for Crypto Token Launches

For years, landing a top VC on the cap table was a powerful signal. It drew attention, drove up prices, and gave projects instant credibility. That era is changing fast. Having a big-name investor no longer moves the market the way it once did.

The DeFi Edge notes that as VC influence fades, something else tends to take its place. Projects with real users and real revenue start to stand out. Fairer launch models gain traction. Insider dumps become less of a dominant force in the market.

The shift is already visible across the crypto landscape. Community-driven ecosystems are drawing more engagement. ‘

Builders focused on product over the next funding round are finding an audience. The model that relied on VC prestige to push tokens into retail hands is clearly not working as well anymore.

The Galaxy Research chart shared by The DeFi Edge tells the story clearly.

Fundraising peaked and then cratered. Returns followed. The dynamics that once made a VC stamp feel like a guarantee of success have quietly eroded, leaving 2025 token investors to deal with the fallout.