$FIL
During bull rallies, venture investors frequently assign inflated valuations to crypto startups, driven by abundant liquidity, speculative hype, and optimistic growth assumptions that exceed observable fundamentals. Once market conditions normalize, these projects undergo a pronounced “reality check” as their tokens trade in open markets, where pricing reflects genuine demand, execution risk, and token supply dynamics.
This process exposes a persistent disconnect: fully diluted or privately negotiated valuations in the hundreds of millions can list and stabilize at a fraction of those levels, even when broader risk appetite remains elevated. Recent episodes, in which numerous high‑profile projects transitioned from secondary‑market darlings to significantly marked‑down assets, illustrate how rapidly narrative‑driven premiums can unwind once transparent price discovery occurs.
The latest industry downturn has rendered this divergence especially visible, compelling both founders and investors to accept markdowns, renegotiate terms, and prioritize sustainable traction over headline valuations.