GSR says the token market is unlikely to escape the familiar post-listing slide unless launches move toward lower valuations, higher initial circulating supply, and broader public participation. In a research note produced by its research and consulting teams, the firm reviewed every token listing it could track on major exchanges since 2013, building a dataset of more than 2,300 launches with information on performance, circulating supply, fully diluted valuation, and sector.
The headline numbers are harsh. According to the report, the median listed token falls below its issue price within three days and is down 50% within 90 days. GSR said the dataset includes dead and delisted tokens, so the results are not flattered by survivorship bias.
Circulating supply fell while valuations stayed elevated
GSR said the ICO era had many flaws, but it did put tokens into public hands earlier. The median circulating supply at first listing stood at 38% to 41% in 2017 and 2018. As fundraising shifted toward private rounds under tighter regulation, venture rounds began setting valuations, while points programs and airdrops replaced public sales. By 2020, the median circulating supply at listing had dropped to about 13%. It recovered only partly after that and remained mostly in the teens to low 20s in later years.
The firm argues that circulating supply on its own understates the problem because float has to be judged alongside valuation. Releasing 5% of a token worth less than $50 million is not the same as releasing 5% of a token valued at $1 billion.
Grouped by launch FDV, the median circulating supply declined as valuations rose. Tokens with an FDV below $10 million had a median circulating supply of 97%. That figure was 28% for tokens between $10 million and $100 million, 16% for those between $500 million and $1 billion, and 13% for tokens above $1 billion. GSR said the higher the valuation, the thinner the float, and described that as a pattern the industry has effectively standardized.
Why low-float, high-FDV launches keep bleeding
GSR’s explanation is structural. When only a small portion of supply is available for trading, even moderate demand can lift the implied value of the entire token. On day one, that benefits nearly everyone inside the issuance structure: venture investors can mark holdings at the listing price, team allocations are valued off the same price, and exchanges get a marquee asset. The participant who would benefit more from a lower token price is the buyer.
Then the unlock schedule begins. Supply that was excluded from circulation starts entering the market on a preset timetable and is sold against a price discovered by a much smaller float. GSR said no bad intent is required for this outcome. The structure itself aligns incentives in that direction.
The performance data tracks that logic closely. The report says the median token is down roughly one-fifth to one-quarter within a month and is close to halved by day 90. Among tokens that listed with an FDV above $1 billion, the median invested dollar was worth just $0.19 after 360 days, equal to a median one-year return of -81%.
Higher float showed better one-year retention in key ranges
GSR also compared outcomes across float bands. Launches with circulating supply below 20% retained about $0.23 to $0.26 per dollar after one year. Launches with circulating supply between 30% and 50% retained about $0.55, more than double the lower-float group.
The report said the relationship breaks down at the upper end because near-fully circulating launches are concentrated in lower-cap tokens and meme coins. Still, within the range where higher-profile and higher-valuation projects tend to launch, broader distribution outperformed float structures designed mainly to create scarcity.
GSR says public equities have drifted in the same direction
The firm argues this is no longer only a crypto issue. In public equities, it said, companies have increasingly stayed private for longer, allowing insiders and late-stage funds to build positions at rising valuations before listing only a small portion of shares to public investors. On a three-year buy-and-hold basis, IPO cohorts from every year since 2019 have underperformed the broader market, with the more recent cohorts ranking among the worst on record.
In GSR’s framing, crypto’s issuance problem is also a modern IPO problem, except token unlocks happen faster and disclosure is thinner.
Three practical levers in place of a single fix
GSR does not present a one-size-fits-all answer. It says it is skeptical of anyone selling a single solution, but from its experience across hundreds of launches, several practical levers stand out.
First, launch pricing should leave room for both holders and traders to make money. GSR said the industry’s durable communities have tended to form around assets that the public could access early and at lower prices. Selling the first public allocation at the highest private-market valuation does the opposite, in its view, because it places holders into a position that is likely to disappoint. It also pushes traders away. A token that trends down from day one offers little reason to build short-term positions, little two-way liquidity, and fewer natural counterparties when holders want to sell. GSR describes traders and holders as complementary groups: traders provide liquidity and price movement, while holders provide the demand base that makes a market worth trading.
Second, enough supply should circulate at listing for price discovery to mean something. GSR said the right level should sit well above the 13% to 20% lows seen from 2020 to 2022, and it should always be judged in the context of valuation rather than in isolation. As a reference point, the report notes that a typical stock IPO floats around 30%, while 50% is already considered high. In crypto, it added, listing major assets with more than half the supply in circulation is also rarely the right answer. The goal is not maximum float. The goal is enough float for the first-day price to be informative.
Third, projects should widen both who gets to participate and when they get to participate. GSR pointed to the recent growth of co-investment platforms that let smaller checks access venture-style terms. It also cited reputation-gated allocations for real users, public sale channels, on-chain auctions, and fully diluted fair launches. Each approach has trade-offs, the report said, but all move in the direction of broader participation.
Regulatory changes could alter issuance choices
The report also said the legal and compliance backdrop has improved. In Europe, MiCA already allows issuers to offer tokens directly to the public. In the United States, the draft CLARITY Act contemplates capped direct sales to retail buyers. If that bill passes, GSR said, the argument that securities law forces projects into private accumulation models would weaken sharply. Issuance structure would look more like a choice than a constraint.
GSR disclosed its role in issuance and secondary markets
GSR said it is an active participant in token issuance and secondary trading. Its business includes market making and liquidity provision, issuance and listing advisory work, and OTC execution and block trading for foundations, teams, and early investors managing concentrated positions.
The firm added that no two launches are the same. Stage, sector, jurisdiction, venue strategy, community profile, and unlock design all affect what a reasonable float and valuation should look like. The answer for a $50 million project is not the answer for a $5 billion project.
On that basis, GSR said it works with token issuers, foundations, and investors on launch and listing strategy, including float sizing, valuation, allocation, and unlock design, while also providing post-listing market making, liquidity services, and OTC execution for concentrated or unlocking positions.
The report closes on a simple point: projects that build a durable holder base are more likely to be the ones that price public access so buyers can win, release enough supply for prices to be real, and let insiders benefit more slowly alongside the community rather than ahead of it.
