Today’s newsletter takes stock of where capital actually went as we move through the end of the year. We start with index readings showing a continued rotation into large, proven crypto infrastructure while speculative sectors continue to unwind. Then we quantify the damage across 2025 token launches and close with takeaways from Friday’s 0xResearch livestream on what the next phase of crypto looks like structurally, not narratively.

Bitcoin was essentially flat over the past week (+0.3%), underperforming traditional benchmarks — NASDAQ (+1.7%), Gold (+1.1%), and S&P 500 (+0.9%). The divergence accelerated mid-week around Dec. 18, when most crypto sectors sold off sharply while equities held steady, suggesting a crypto-specific risk-off move rather than broader macro weakness.

DEXs (+11%) led all indices, followed by Crypto Miners (+9.5%) and the 2025 Crypto Equity Cohort (+9.2%). DEX outperformance was driven by UNI up +15.4%, following the UNIfication vote live onchain, with 69M UNI (40M quorum) voting yes. L1s (-2%) and Exchange Tokens (-2.2%) posted modest losses.

AI was the worst-performing sector (-21%), driven largely by TAO (-21%). TAO weakness likely reflects a sell-the-news unwind around Bittensor’s first halving (around Dec. 14), which cut daily issuance in half but did not immediately translate into incremental demand, alongside broader de-risking across the AI token complex.

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On Friday’s 0xResearch livestream, the team unpacked why “crypto is not dead,” but why the industry’s next phase looks structurally different from the last cycle.

Key discussion points:

• Crypto natives vs. mainstream users. The panel argued that most crypto products still optimize for an insular, crypto-native audience, while real growth requires applications that abstract away wallets, chains, and jargon. Tools like embedded wallets and fiat on-ramps (e.g., Moonshot-style UX) show that direct-to-onchain onboarding for non-natives is now technically feasible, even if intent and execution lag.

• Business development is broken. Much of what crypto calls “BD” functions as partnership marketing or token-price signaling rather than real sales. The group stressed that chains should sell to application developers (their true customers), not end users, drawing parallels to AWS’ relationship with software builders.

• Spot vs. perps and asset gravity. Solana’s success attracting spot asset launches was contrasted with Hyperliquid’s dominance in perps. The debate centered on whether owning asset issuance and liquidity (the “NASDAQ onchain” model) ultimately drives innovation and defensibility, even if short-term fee capture looks weaker.

• Infrastructure is becoming boring, but necessary. Infrastructure investing is shifting away from general-purpose chains toward narrow, enabling layers that unlock applications (e.g., wallet infrastructure, custody abstractions). These businesses may have lower margins, but clearer product–market fit and monetization paths.

• Monetization and stablecoins. The panel explored how chains might monetize beyond transaction fees, including native stablecoins and in-house primitives, while warning that excessive fragmentation risks degrading UX and trust.
  Aave governance and alignment risk. A deep dive on Aave highlighted structural tension between the DAO token and Aave Labs’ equity entity. Panelists argued that split cap tables create long-term value leakage and governance fragility, especially as competitors like Morpho gain traction.

• The future of crypto investing. “Crypto funds” as a label may disappear over time, similar to how “internet funds” faded. Winners are likely to be specialists in fintech, applications, or specific verticals, rather than generalist crypto-native allocators.

Watch the full livestream on YouTube, and listen on Spotify and Apple Podcasts.

The Death of New Launches

With year-end approaching, it’s worth zooming out on 2025’s worst tape: new token launches. A recent post by Ahboyash put hard numbers behind what many felt intuitively. Across 117 tokens launched in 2025, returns are overwhelmingly negative. The median token is down ~71% versus its listing fully diluted valuation (FDV). Only 17/117 (15%) trade above launch valuation, while roughly 40% are down more than 80%.

The downside is both broad and severe: 100/117 tokens (85%) are underwater. Losses cluster most heavily in the 50–90% drawdown range, which represents the largest share of launches.

At the extreme tail, 15 tokens have declined more than 90%, including high-profile launches such as Berachain (-93%), Animecoin (-94%), and Bio Protocol (-93%).

In aggregate, the cohort’s total FDV has compressed from $139B at listing to $54B today, implying roughly $87B (59%) of “paper” FDV destruction, excluding any projects that effectively went to zero.

The dispersion on the right tail is real, but concentrated. The worst performers skew toward infrastructure and gaming, with Syndicate (-93.6%) and Animecoin (-93.6%) among the laggards. Meanwhile, the standout winners are largely later-stage, H2 launches with lower starting valuations, including Aster (+745%), Yooldo Games (+538%), and Humanity (+323%).

— Shaunda Devens

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