GSR: Why Low-Float, High-FDV Tokens Struggle to Maintain Value

GSR research, analyzing over 2,300 token launches since 2013, reveals that tokens with high fully diluted valuations (FDV) and low initial circulating supplies consistently underperform. The median initial circulating supply at launch has halved since 2017, dropping from 38% to around 13% by 2020. Data shows that tokens launching with an FDV exceeding $1 billion see a median one-year return of -81%. The report suggests that this issuance structure, where limited supply is released at high valuations, creates inevitable downward pressure as locked tokens enter the market over time. This trend is increasingly mirroring patterns seen in traditional equity markets, where IPOs have also struggled to outperform over three-year periods.