Early-stage crypto traders face 50% common loss on locked positions

Locked token holders have skilled a mean drawdown of practically 50% for his or her locked positions in comparison with over-the-counter (OTC) valuations in Might 2024.

In keeping with knowledge revealed by STIX founder Taran Sabharwal on April 22, holders may have exited their positions at double the present spot costs the earlier yr.

Sabharwal shared knowledge evaluating absolutely diluted valuation (FDV) estimates from Might 2024 in opposition to present FDVs as of April 2025 for main tokens, together with JITO, BERA, ZRO, WLD, TIA, IO, W, ZK, EIGEN, SCR, and BLAST.

Widespread devaluations throughout high tokens

Among the many tasks tracked, practically all confirmed appreciable valuation declines. SCR and BLAST recorded the biggest year-over-year drawdowns at -85% and -88%, respectively.

EIGEN adopted carefully with a -75% drop. Different tokens, similar to ZK (-64%), W (-50%), IO (-48%), and TIA (-44%), additionally posted substantial declines relative to their locked OTC valuations from the earlier yr.

Solely JITO posted a rise, with a +75% achieve relative to final yr’s valuations, standing out as an exception in an in any other case broadly detrimental atmosphere for locked token holders.

In keeping with Sabharwal, the disparity between OTC valuations and present spot costs highlights the dangers of investing in illiquid, locked positions throughout early-stage token rounds. 

Whereas these early investments are usually structured with the expectation of long-term upside, market volatility and project-specific elements over the previous 12 months have led to substantial underperformance relative to preliminary valuations.

In the identical interval, the 22 sectors within the crypto market, along with Bitcoin (BTC) and Ethereum (ETH), skilled a mean correction of 40.7%, primarily based on Artemis knowledge. That is practically 20% higher than the efficiency of locked tokens. 

Implications for token markets and early traders

The information means that many early-stage token traders who dedicated to locked positions might have missed higher exit alternatives within the secondary market all through 2024. 

Locked tokens usually include vesting schedules or switch restrictions, which stop instant liquidity and expose holders to market shifts in the course of the lock-up interval.

The information shared by Sabharwal additionally displays broader market situations affecting absolutely diluted valuations throughout the crypto sector. Newer tasks face intensified stress in secondary markets in comparison with their preliminary fundraising rounds.

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