Author: DWF Ventures

Translation: Deep Tide TechFlow

Deep Tide Introduction: This report by DWF Ventures clearly states one thing with data: Money has not left crypto; it has just changed tracks. In 2025, over 80% of token issuance prices broke below the issue price, while crypto IPO financing surged 48 times to $14.6 billion, and M&A reached a five-year high of $42.5 billion. This is not just a market sentiment issue, but a systemic migration of capital structure, with a number of IPOs from Kraken, Ledger, Animoca, and others on the way in 2026.

Core Conclusion

The old playbook for token issuance has ended. High valuations and declining liquidity have undermined investor confidence, and we see capital flow shifting toward equity.

Tokens and equity have similar upside potential, but their risk structures are vastly different: Tokens peak faster (within 30 days) and face greater volatility, while equity maintains a stable upward trend over a longer time dimension.

Equity enjoys a higher valuation premium than tokens: This premium is attributed to institutional access barriers, indexing potential, and the richer trading strategies supported by equity.

Price-to-Sales (P/S) ratio provides a useful benchmark for assessing companies, but valuation dispersion reflects the importance of other factors, including regulatory moats, revenue diversification, shareholder value, and sector sentiment.

M&A activity has hit a five-year high, and integration is accelerating: Acquisition capabilities have proven faster than building independently, and regulatory compliance is driving strategic mergers.

Current Status of Token Issuance

The crypto industry has reached a turning point. Billions of dollars are flowing in, institutional interest is at a peak, and regulation is becoming friendlier—yet for builders and users, everything feels dimmer than ever. The widening gap between institutional capital inflow and the morale of the crypto-native community is part of a larger issue—the original spirit of decentralization and crypto-punk experimentation seems to be gradually dissipating with the influx of centralized entities and their immense influence.

Crypto has also thrived in a high-risk, casino-like environment, which is being slowly stripped away as token performance sharply declines. This is also driven by extractive events that significantly impact retail investors, leading to a withdrawal of liquidity from the market.

According to Memento Research's report, over 80% of token issuances in 2025 currently trade below their TGE price. Projects have faced severe shocks from high volatility and generally weak token demand—because high valuations are hard to prove and maintain. Upside potential is also extremely scarce, with most tokens facing significant sell pressure since TGE—stemming from early profit-taking, lack of substantial confidence in products, or poor token economic models (airdrops, CEX listings, etc.). This has deterred interest from investors and retail participants, while events like 10/10 have further exacerbated the outflow of crypto funds, raising questions about the industry's core infrastructure.

Rise of IPOs

Meanwhile, in traditional markets, IPOs are gaining strong traction among crypto companies—2025 has seen many noteworthy listings, and more companies are submitting applications for upcoming IPOs. Data shows that crypto IPO financing grew 48 times compared to 2024, with funding exceeding $14.6 billion in 2025. M&A transactions have also experienced similar growth, as leading core companies seek diversification, which we further explore below. Overall, the excellent performance of these companies illustrates the strong demand for exposure to digital assets, and this momentum may further accelerate as we enter 2026.

Direction of Liquidity

Over the past year, we have seen that both high-profile IPOs and ICOs have raised substantial amounts of capital. The table below shows the financing amounts and initial valuations of various companies.

From this, we observe that the valuations of IPOs and ICOs are relatively close. Certain ICOs, such as Plasma, are specifically priced below institutional investor valuations, aiming to provide retail investors with greater upside and participation opportunities. On average, the public share ratio of IPOs ranges between 12% to 20%, while the public trading ratio of ICOs is between 7% to 12%. World Liberty Finance is a notable exception, offering over 35% of the total supply for sale.

Analyzing the performance of ICOs and IPOs, tokens are associated with greater short-term volatility and shorter peak times (within 30 days). On the other hand, equity tends to record steady increases over longer time dimensions. Notably, despite this, both exhibit similar upside potential.

CRCL and XPL are exceptions that experienced significant gains from the start, providing investors with 10 to 25 times upside potential. However, their performance also followed the aforementioned trends—XPL retraced 65% from its peak within two weeks, while CRCL steadily climbed during the same period.

Revenue: Assessing Equity Premium

In-depth analysis of revenue figures shows that stocks, in general, enjoy higher premiums than tokens, with P/S ratios ranging from 7 to 40 times for stocks and 2 to 16 times for tokens. This is attributable to enhanced liquidity brought about by various factors:

Institutional Access: Despite growing positive sentiment towards holding digital assets on balance sheets, this is still limited to funds authorized to hold securities (especially pension or endowment funds). Choosing IPOs allows companies to tap into this pool of institutional capital.

Index Inclusion: The growth momentum in public markets is far stronger than that on-chain. Coinbase joined the S&P 500 index in May 2025 as the first crypto company, which may have contributed to buying pressure from index-tracking funds/ETFs accumulating positions.

Alternative Strategies: Compared to on-chain tokens, equities can facilitate a wider variety of institutional strategies, including options and leverage, whereas on-chain tokens often lack liquidity and counterparties.

Overall, the P/S ratio indicates company valuations based on revenue from the past 12 months, aiding in assessing whether a company is undervalued or overvalued relative to competitors. However, factors beyond the numbers reflecting investor sentiment have not been incorporated. Some factors to consider when evaluating stocks/tokens include:

Moats and Diversification: In the rapidly evolving digital asset industry, this is crucial. The market is paying premiums for licensing and regulatory compliance, while a diversified business layout can reinforce the core business's value proposition beyond pure revenue numbers.

For instance, Figure launched its own RWA lending pool open to both retail and institutional investors and became the first to receive SEC approval for a yield-generating stablecoin ($YLDS). Bullish is a regulated exchange that also owns other businesses such as CoinDesk, enhancing its value beyond pure trading services. These factors may contribute to higher premiums.

In contrast, eToro's P/S is extremely low, appearing "undervalued" at first glance, but a deeper dive reveals that its revenue growth has kept pace with rising costs, which is not the optimal scenario. Additionally, the company focuses solely on providing trading services, lacking differentiation and with low profit margins. This indicates that establishing a defensible moat and diversified business layout is also a key consideration for investors.

Shareholder Value: Returning capital to investors through buybacks is common in both stocks and tokens, particularly for high-revenue companies.

For example, Hyperliquid has one of the most aggressive buyback programs, using 97% of its revenue for buybacks. Since inception, the assistance fund has repurchased over 40.5 million HYPE tokens, accounting for more than 4% of the total supply. Such aggressive buybacks have impacted prices, boosting investor confidence as long as revenues remain stable and the sector still has growth potential. This brings a higher P/S ratio, but it does not necessarily mean tokens are "overvalued," as there is real strong support from the team itself.

Sector Sentiment: High-growth sectors determined by institutional or regulatory dynamics naturally enjoy premiums, as investors seek related exposure.

For instance, Circle's stock price surged rapidly post-IPO in June 2025, with P/S ratios reaching a peak of approximately 27 times. This may be attributed to the passage of the GENIUS Act—a framework aimed at legitimizing the adoption and issuance of stablecoins, introduced shortly after Circle's IPO and positioning Circle as one of the major beneficiaries in the stablecoin infrastructure space.

M&A: Major Consolidation

According to the report, crypto M&A activity hit a five-year high in 2025—driven by significant entry from TradFi institutions and an increasingly friendly regulatory environment. Following the Trump administration's introduction of a series of crypto-friendly policies, a surge of Digital Asset Treasuries (DAT) emerged, making holding digital assets on balance sheets less controversial. Companies are also shifting focus to acquisitions as a more efficient way to gain specific licenses to enhance compliance. Overall, the introduction of an appropriate regulatory framework has laid the foundation for accelerated M&A.

Looking back over the past year, we have seen a significant increase in the number of transactions across various categories. The following three categories have become institutional priorities:

Investment and Trading: Covering trading settlement, tokenization, derivatives, lending, and DAT infrastructure;

Brokers and Exchanges: Regulated platforms centered on digital assets;

Stablecoins and Payments: Covering inflow and outflow channels, infrastructure, and applications.

These three categories collectively accounted for over 96% of transaction value in 2025, totaling over $42.5 billion.

Leading acquirers include Coinbase, Kraken, and Ripple, all involved across multiple categories. Among them, Coinbase's layout stands out particularly, highlighting its ambition to become a "one-stop super app," with a core focus on bringing blockchain to the masses through acquisitions of traditional and innovative DApps. This is fueled by intensified competition among exchanges and the pursuit of a comprehensive traffic entry.

Companies like FalconX and Moonpay are deeply cultivating their own categories, building comprehensive service capabilities through complementary acquisitions.

Next Steps for Token Issuance

Despite the current market environment and sentiment, we believe that 2026 will continue to bring substantial tailwinds for the digital asset space. We expect more companies to go public, which is net positive for the industry overall—it provides greater accessibility to a pool of capital and investors, effectively enlarging the pie.

The next batch of IPO candidates includes:

Kraken: Submitted an S-1 registration statement to the SEC in November 2025, with strong expectations for an IPO in early 2026;

Consensys: Reportedly working with Goldman Sachs and JPMorgan to prepare for a mid-2026 listing;

Ledger: Targeting a $4 billion valuation, now collaborating with Goldman Sachs, Jefferies, and Barclays to advance its IPO;

Animoca: Planning to list on NASDAQ in 2026 through a reverse merger with Currency Group Inc.;

Bithumb: Aiming for a $1 billion valuation in 2026 to list on Korea's KOSDAQ, underwritten by Samsung Securities.

The path forward is not a choice between TradFi validation and crypto-native innovation—it is a fusion. For builders and investors, this means prioritizing fundamentals and building useful products that generate real, sustainable revenue. A mindset shift toward long-termism may cause some turbulence, but those who adapt will seize the next wave of value creation.

Tokens are dead, long live crypto.

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