Rebecca Cruz Crypto capital rotates from tokens to stocks as new token launches struggle and investors seek equity exposure through IPOs and M&A. Institutional money now favors listed crypto firms over speculative tokens.
Crypto capital rotates from tokens to stocks as investors seek real-world exposure
The crypto market is undergoing a deep structural transformation as crypto capital rotates from tokens to stocks. With over 80 percent of new token launches in 2025 now trading below their debut price, investors appear to be losing patience with speculative plays and shifting toward publicly listed crypto firms offering clearer ownership and measurable performance.
According to market data from DWF Labs and Memento Research, most tokens launched this year have seen drawdowns of 50 to 70 percent within 90 days of listing. While early trading enthusiasm remains high, selling pressure from airdrops and early investor unlocks has crushed post-launch performance. The data suggests that token buyers are facing steep short-term losses even as broader capital flows within the sector are being redirected toward equities.
From token hype to stock strength
The rotation trend has been reinforced by an unprecedented surge in crypto-related IPOs and merger activity. As crypto capital rotates from tokens to stocks, traditional fundraising channels are showing new vitality. Crypto IPOs in 2025 have reportedly raised about $14.6 billion, a 48-fold jump from the previous year, while merger and acquisition activity surged to over $42.5 billion, the highest in half a decade.
This dramatic shift signals not an exit from crypto, but a migration to instruments that offer transparency, compliance, and sustainable revenue exposure. Market participants are finding that owning shares in regulated crypto businesses like Circle, Gemini, eToro, and Bullish provides access to the same growth story, but with institutional safeguards and clearer reporting standards.
Analysts from DWF Labs note that these listed crypto companies are commanding higher valuations compared to token projects. Public firms in the sector are trading at multiples between 7 and 40 times sales, whereas comparable tokens range from just 2 to 16 times. The gap underscores the premium investors are placing on accessibility and governance two key features that remain elusive in the token ecosystem.
Why the equity model is winning investor trust
As crypto capital rotates from tokens to stocks, experts believe the preference for equity is rooted in a growing demand for clarity, disclosure, and enforceable rights. Maksym Sakharov, CEO of WeFi, explained that when investor risk appetite tightens, capital does not leave the ecosystem it simply moves toward instruments with cleaner ownership structures and stronger legal backing.
Equity exposure enables investors to participate in the crypto economy through custody, payments, settlement, and infrastructure services that mirror traditional finance. These businesses align with real-world licensing and compliance requirements, making them easier to integrate into existing portfolios. By contrast, token-based models often lack the revenue consistency, user retention, and transaction volume needed to sustain value beyond the initial hype cycle.
The distinction between tokens and operating businesses is becoming increasingly evident. Many new token launches promise rapid gains but fail to establish lasting ecosystems or steady cash flows. Without tangible utility or recurring demand, token valuations quickly deflate once early excitement fades.
Public crypto companies, on the other hand, are required to meet rigorous disclosure standards and offer measurable performance metrics, from earnings to user growth. This clarity allows both retail and institutional investors to make informed decisions something that remains difficult in token markets dominated by opacity and speculation.
A lasting structural shift in crypto investment
The trend that began as a short-term rotation now appears to be solidifying into a long-term structural realignment. As crypto capital rotates from tokens to stocks, institutional investors are reshaping the future of digital asset finance. Tokens will continue to play a critical role in decentralized networks, serving as incentives and governance tools, but the dominance of speculative token launches is fading.
Market participants now recognize a bifurcation between genuine, revenue-generating protocols and the long tail of projects driven primarily by hype. Serious protocols with real adoption and financial discipline will survive, while the majority of speculative token launches will struggle to attract meaningful liquidity.
This transition marks a new maturity phase for the crypto industry. The rotation of crypto capital from tokens to stocks suggests that investors are no longer chasing the fastest gains but are instead pursuing sustainable exposure to the crypto economy through equity rails. With regulated IPOs, audited financials, and institutional-grade transparency, crypto equities are quickly becoming the preferred gateway for serious capital.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.
