Analysis of 3,759 non-stablecoin tokens: ~80% of freshly minted cryptocurrencies are underwater, with average one-year returns close to zero relative to bitcoin
The market for new tokens looks surprisingly efficient … Tweets: Leigh Drogen / @ldrogen : The issue with the Jump paper is that it intentionally leaves out any filtering whatsoever on the universe it measures Yea, if you include every nonsense thing listed on Coingecko no matter what there's no alpha in new issues https://www.bloomberg.com/...
Context & Ripple Effects
This Bloomberg study lands two weeks after a January analysis showing most coins underperform BTC and ETH over time, with VC-backed tokens delivering the worst returns of all — so the finding that roughly 80% of 3,759 freshly minted non-stablecoin tokens are underwater extends an already-established pattern from the broad market to the new-issue market specifically.
Leigh Drogen's pushback sharpens the interpretation: he argues the underlying paper applies no filtering to its universe, so measuring every Coingecko listing 'no matter what' mechanically produces no alpha in new issues. The debate is whether that is a bug (bad methodology) or the point (the average new token really is a zero-versus-bitcoin bet).
First-order effects
- Buyers of fresh token listings learn that, unfiltered, the asset class offers no edge over simply holding bitcoin — issuers and exchanges whose listing pipelines monetize new launches face direct scrutiny over what those listings are actually worth to buyers.
Second-order effects
- Capital concentrates further into BTC and ETH: if the marginal new token returns nothing relative to bitcoin, the liquidity premium of established assets tightens its grip, and VC token portfolios — already flagged as the worst performers in the January analysis — come under added pressure to justify their markups.
Third-order effects
- If the pattern holds, token issuance stops functioning as an investment category and starts functioning as raw capacity supply — a trajectory later borne out by [[a:1161708|CoinGecko's finding that over half of the 20.2M tokens launched since 2021 are now inactive]] — echoing the same illiquidity dynamic seen when most OpenSea NFTs stopped trading altogether.
The trend: Crypto's new-issue market is maturing into an efficient, washout-prone segment where unfiltered fresh tokens deliver no alpha versus bitcoin, steadily consolidating value in a handful of established assets.