Analysts have identified the reasons why the market preferred stocks, switching to shares instead of cryptocurrencies
The crypto market has reached a paradoxical point in its development. In recent years, the industry has seen record institutional capital inflows, a developed trading infrastructure, and regulatory goodwill around the world. And yet, for many developers and crypto users, the investment situation “looks bleaker than ever.” Analysts at investment company DWF Ventures came to this conclusion after comparing the performance of crypto companies traded on exchanges and individual cryptocurrencies, even though both types of assets (stocks and cryptocurrencies) are “similar in terms of growth potential.”
The key message from the experts is that there is demand for blockchain assets, but it is institutional and sporadic. Mass retail investors, traditionally the drivers of cryptocurrency growth, are being washed out of the markets.
The context of DWF's analysis refers to the dynamics of crypto assets launched in 2025: the prices of almost 85% of the sample, consisting of 118 projects, traded below the starting price. Two-thirds of the tokens in the sample lost more than 50% of their value, and 38% had a market capitalization 70-90% below their initial value.
Large launches with inflated initial valuations performed particularly poorly. Of the 28 launches with an initial valuation (fully diluted value, FDV) of $1 billion, none ended up in the black. The median drawdown at the time of the study (end of December 2025) was about 81% — since then, the total capitalization of the crypto market has fallen by another 25%, which may indicate worse performance by mid-February.
ICO vs. IPO
DWF Ventures analyzed the dynamics of both cryptocurrency assets that entered exchanges through ICOs (similar to IPOs) and crypto companies that entered exchanges through IPOs. It was found that crypto assets show explosive growth only in the first 30 days, after which a sharp price correction is highly likely. At the same time, shares of crypto companies “demonstrate stable growth over a longer period of time.”
DWF specifies that such price dynamics are observed against the backdrop of relatively similar investment valuations for both ICOs and IPOs before going public. But there is a noticeable difference in the number of assets that were issued at the start of trading — experts noted that, on average, the share of assets offered for sale ranges from 12 to 20% for IPOs and from 7 to 12% for ICOs.
As Matt Houghan, director of investments at Bitwise Asset Management, previously noted: “It is impossible to know in advance what will bring greater value, the blockchains themselves or the companies developing them. That's why I think the best strategy is to own both.”
Income difference
The report also indicates that crypto platforms' profit margins are significantly higher than those of traditional companies. DWF noted that stocks tend to trade at a higher premium to their earnings compared to cryptocurrencies — this refers to the ratio calculated as capitalization divided by earnings. This ratio ranges from 7 to 40 for companies and from 2 to 16 for crypto platforms.
Thus, crypto platforms are generally more profitable relative to their capitalization than traditional companies. However, experts believe that there are several factors that explain this dynamic.
Access for institutional investors. Despite growing positive sentiment toward cryptocurrencies, their purchase and storage are still limited to funds and individual companies.
Inclusion Of Stocks In Indices. Stocks become the subject of passive investment by indices and funds whose strategies are aimed at purchasing certain securities. For example, in the spring of 2025, Coinbase became the first crypto company to be included in the S&P 500 index, one of the main benchmarks of the US stock market. This could have contributed to increased buyer activity through the accumulation and retention of shares in index and other funds.
Alternative strategies. Unlike tokens on the blockchain, which often suffer from a lack of liquidity and counterparties, the use of options and leverage for institutional investors allows for a wider range of institutional strategies to be implemented using options and stocks.
Business diversification. The variety of services offered strengthens the value proposition of the core business. DWF cited the example of Figure, which launched its own blockchain-based lending pool accessible to retail and institutional investors. It was also the first to receive regulatory approval for a stablecoin that generates interest income for its holders (YLDS).
As a forecast for 2026, DWF expects an increase in the number of companies preparing to go public, “which will have an overall positive impact on the industry,” contributing to the growth of the overall market. This year, experts expect at least five major crypto companies to conduct IPOs or merge with other companies.
These include the Kraken crypto exchange, Ethereum infrastructure developer Consensys, hardware crypto wallet manufacturer Ledger, investment company Animoca Brands, and Korean crypto exchange Bithumb.