Crypto capital is witnessing a significant shift as funds move from crypto capital into publicly listed companies, while token launches face challenges, according to DWF Labs. This trend highlights a growing preference for equities over tokens among institutional investors.
Why Crypto Capital is Moving
Market maker DWF Labs has provided insights into this capital rotation, drawing on data from Memento Research. Their analysis of hundreds of token launches revealed that over 80% of projects are trading below their initial Token Generation Event (TGE) price. Typical declines range from 50% to 70% within 90 days post-listing, indicating immediate losses for public buyers.
Andrei Grachev, Managing Partner at DWF Labs, noted that this pattern isn’t just market volatility but a consistent trend. Tokens tend to peak within a month and then decline due to selling pressure. The TGE price, set before launch, often doesn’t hold as anticipated.
Equity Markets Gain Traction
In contrast, traditional markets linked to the crypto sector have seen robust growth. Fundraising for crypto-related IPOs reached $14.6 billion in 2025, a sharp increase from the previous year. Additionally, merger and acquisition activities hit $42.5 billion, marking a five-year high.
Grachev emphasized that this shift is a rotation, not a withdrawal of capital. The surge in IPOs and M&A activities alongside outperforming crypto equities suggests a changing investment landscape.
Institutional Preferences and Valuation Gaps
Institutional investors are gravitating towards equities due to regulatory constraints. Public equities from companies like Circle and Gemini traded at higher price-to-sales ratios compared to tokens. This valuation gap is attributed to the accessibility and compliance of securities markets.
Maksym Sakharov, co-founder of WeFi, confirmed this capital rotation. Investors now favor businesses with infrastructure-like characteristics, including custody and compliance. The equity wrapper offers clearer ownership, aligning with institutional needs.
Despite these trends, tokens remain integral to crypto networks for incentives and governance. Grachev noted that while tokens won’t disappear, serious protocols with real revenue will flourish, leaving speculative launches in a tough spot.
