Analysis: 24% of the 40,521 tokens launched in 2022 that “got traction” saw a 90%+ price drop in their first week of trading, suggesting pump-and-dump activity
Chainalysis :
Context & Ripple Effects
This Chainalysis finding slots into a run of forensic studies exposing how thin the line between token issuance and outright fraud has been. An earlier Bloomberg analysis found roughly 80% of freshly minted non-stablecoin tokens underwater with near-zero average one-year returns versus bitcoin, and a separate study flagged pre-listing buying on decentralized exchanges ahead of 10–25% of Coinbase listings since 2018 — consistent with insiders positioning ahead of announcements.
First-order effects
- Buyers who chased the initial traction on those 40,521 launches absorbed most of the damage: a 90%+ collapse inside seven days means late entrants were effectively funding exits for early holders.
Second-order effects
- Exchanges and launchpads face mounting reputational exposure from what they list — the related finding that 46 wallets made $1.7M+ buying tokens just before major listings shows coordinated actors already profit at the listing boundary, so venues are pushed toward stricter vetting and surveillance.
Third-order effects
- If issuance keeps outpacing quality control, the token market consolidates around a small set of vetted assets while the long tail dies off — a trajectory CoinGecko's later count of over 53% of post-2021 tokens now inactive confirms was well underway.
The trend: Token markets are bifurcating between a vetted core and a manipulated long tail, forcing issuers, exchanges, and regulators to treat launch mechanics themselves as the fraud frontier.