2300+ Tokens Show Price Drop Below Issuance Value Within 3 Days

A study by GSR analyzing over 2,300 tokens listed on major exchanges since 2013 revealed that the median price of these tokens fell below their issuance value within three days of listing and declined by approximately 50% within 90 days. The research showed that tokens with a fully diluted valuation (FDV) exceeding $1 billion had a one-year median return of -81%. Tokens with less than 20% initial circulating supply saw an average decline of about 75% after one year, while those with 30-50% initial circulation dropped around 45%.

GSR explained that initial circulating supply and listing valuation both influence price movements. When only a portion of the total supply is released to market at high FDV, token values can be significantly overestimated with low trading volume. After listing, additional tokens are gradually released according to predetermined schedules. GSR noted that as more supply enters the market following an initial price formation based on limited liquidity, prices may weaken.

The study found a trend where higher FDV listings tend to have lower initial circulating supply. Tokens with FDV under $10 million had a median circulation rate of 97%, while those exceeding $1 billion had only 14%. Initial circulating supply has decreased over time: in 2017 it was 38% for listed tokens, dropping to 13% by 2020. Although there has been some recovery since then, most years have seen circulation rates between the mid-teens and low twenties.

GSR reported that median prices typically fall about 20-25% below issuance value after one month and nearly halve within 90 days. For tokens with FDV over $1 billion, a $1 investment would be worth approximately $0.19 based on median values after 360 days. GSR suggested that issuers should increase initial circulating supply and consider both FDV and circulation when setting listing prices, along with expanding early access through public sales and on-chain auctions.

The research is a statistical analysis of median outcomes across over 2,300 listed tokens, not an individual token price prediction. Token performance varies based on issuance scale, distribution schedules, exchanges, and market-making structures.