The crypto tokens purchased with lockupS by investors at their early stages delivered substantial devaluations relative to their acquisition prices. STIX founder Taran Sabharwal posted data in April which demonstrates that these investors could have sold their tokens at two times the current prices from last year. Almost all tokens experienced substantial devaluation based on the analysis of their fully diluted valuations between May 2024 and the present day.
Worst Performing Tokens
The collected data shows significant negative outcomes affecting all examined projects. The tokens BLAST and SCR experienced the most severe price drops by losing -88% and -85% of their value. The value of EIGEN decreased by -75% throughout its period of observation. The major price devaluations affect ZK by -64% as well as W by -50% and IO by -48% and TIA by -44%. JITO achieved the highest level of success because its value increased by +75% while all other tokens in the study lost value.
Underperforming the Broader Market
The token losses ended up being much higher than what the broader crypto market declined. The locked tokens showed an average loss of approximately 50% while crypto market sectors and Bitcoin and Ethereum experienced an average decline of 40.7% throughout the specific time period. An additional 20% risk emerges from investments made in early stages with immediate locking mechanisms.
Implications for Early Investors
The large gap between OTC prices during investment and spot market valuation today exposes the dangers of buying illiquid assets and locked positions. The investors who bought early could not exit their position when prices dropped because of their vesting schedules and transfer limitations and therefore neglected more profitable selling opportunities throughout 2024. New projects experience extraordinary market pressure during secondary transactions because the values they get from initial fundraising events do not match.
Severe Devaluation of Locked Positions
Early-stage crypto investing shows high risk levels because locked token holders demonstrated significant financial losses when capital has no liquidation options. The statistical data indicates crypto projects need to show both long-term potential benefits against financial market fluctuations and potential enduring losses during required holding constraints.
