The market keeps falling, when is the best time for TGE?

Author: Zhou, ChainCatcher

As February comes to an end, the price of Bitcoin has nearly halved since its peak, and the altcoin market is in a dire state, with the crypto market still shrouded in panic.

Countless projects are facing the same dilemma: should they launch tokens now or wait for a bull market?

A long-standing saying in the market is that TGE (Token Generation Event) is more likely to succeed in a bull market. However, real data and cases seem to show that there are numerous instances of poor projects collapsing to zero after being harvested in a bull market, while high-quality projects can also emerge during a bear market.

How important is the timing of TGE?

1. Is the Timing of Bull and Bear Markets Really Important?

Haseeb, managing partner at Dragonfly, recently stated on the X platform that by using the Claude Code tool to analyze all token launch data from Binance, the research results show that there is no significant statistical difference in the performance of tokens launched during bull and bear markets.

The Mann-Whitney test p-value is 0.81, which means the performance difference between bull and bear market tokens is no different from noise; the timing of token launches is not that important.

He pointed out that since people tend to launch tokens during bull markets when capital is more abundant, there is a sample bias, so one cannot simply observe the proportion of bull market tokens among the top 100 tokens.

This study proves the robustness of this conclusion by comparing the relative performance of about 200 token projects in Binance announcements during bull, bear, and neutral markets.

Additionally, he noted that while launching in a bear market has advantages such as less competition for talent, cheaper service providers, and lower pressure from exchanges, the bull market is more favorable for token sales; overall, these factors tend to offset each other.

Armani Ferrante, CEO of Backpack, added from another perspective that launching tokens in a bear market tends to result in fewer instances of retail investors being massively harvested.

Due to the lack of frenzied enthusiasm in the market, project teams are forced to confront real demand, and speculative funds find it difficult to easily inflate valuations.

Bull Market: Accelerator or Cover-Up?

The high liquidity and FOMO (Fear of Missing Out) in a bull market can indeed accelerate the growth of good projects.

Hyperliquid launched its HYPE token in the latter part of the bull market in November 2024, leveraging the real perpetual contract trading volume accumulated before TGE and a community-oriented genesis airdrop design. Its token price rose from an initial approximately $3.8 to several tens of dollars in 2025, maintaining a high market cap to this day.

Similarly, the Solana ecosystem DEX aggregator Jupiter launched its JUP token in early 2024, quickly establishing a foothold based on actual trading demand.

However, a bull market cannot save low-quality speculative projects.

At the end of the bull market from 2024 to 2025, a large number of purely narrative or meme projects were launched with great fanfare, only to crash shortly after a brief surge.

A typical example is Plasma and other high-valuation projects in 2025, which had FDVs (Fully Diluted Valuation) in the tens of billions at TGE but lacked real usage support. After launch, tokens generally fell by 70-80%, with high openings and low closings becoming almost standard.

According to statistics from crypto VC Delphi Digital, 97% of altcoins have been in a downtrend since January 2025, with an average decline of 78%. Among the 121 altcoins they tracked, only three tokens—HYPE, SYRUP, and BCH—have maintained an upward trend.

Overall, projects lacking real use cases and healthy tokenomics are unlikely to escape the fate of high openings and low closings, even if they catch the bull market windfall.

Bear Market: Filter or Meat Grinder?

The bear market is also a double-edged sword.

On one hand, high-quality projects like Solana launched just days after the COVID crash in March 2020. Although they started at low valuations, they became leaders in Layer 1 during the subsequent bull market due to their underlying performance and continuously expanding use cases.

Uniswap launched in the later stages of the bear market in September 2020, relying on real DeFi demand and community governance to ultimately achieve long-term value.

On the other hand, the bear market can amplify the problems of weak projects.

Coingecko data shows that as of mid-January 2026, 53.2% of cryptocurrencies on the GeckoTerminal platform have gone to zero, with 11.6 million tokens collapsing in 2025, accounting for 86.3% of the total tokens that went to zero between 2021 and 2025. In the fourth quarter alone, 7.7 million tokens crashed, making up 34.9% of all recorded project failure cases.

The low barriers to entry for issuance platforms, combined with liquidity exhaustion and narrative fatigue in a bear market, have caused many low-quality projects to quickly lose trading activity.

It is evident that the timing of issuance is merely an amplifier, not a decisive factor.

A bull market can help good projects take off faster while temporarily masking the problems of poor projects; a bear market makes it harder for good projects to launch but can filter out truly resilient teams.

Ultimately, project quality—real demand, sustainable token economics, and strong execution—is the fundamental factor for traversing cycles.

2. Bear Market Forces Tokenomics Evolution

If timing is not key, then a more pressing question is: how is the bear market changing the underlying logic of token issuance?

For Project Teams: Cost Advantages and New Paradigms

For project teams, the operational costs of TGE in a bear market are significantly lower. Marketing, KOL collaborations, and CEX listing fees are often 30-70% cheaper, and competition pressure is much less, making it easier to attract users and talent who genuinely recognize the long-term value of the project.

More profound changes come from innovations in token economics.

Armani Ferrante, CEO of Backpack Exchange, recently announced that its upcoming token will allow long-term stakers (for at least one year) to exchange for 20% of the company's equity at a fixed ratio. He candidly stated that many past token issuances were built on false promises of utility, with insiders receiving large allocations in advance, ultimately placing the selling pressure on retail investors.

This model of token-to-equity conversion may become a new trend in the bear market. It transforms token holders into true shareholders of the company, sharing in actual growth rather than relying on hollow utility narratives; the mandatory lock-up for at least one year significantly reduces circulation selling pressure and fundamentally avoids the risk of insiders dumping in traditional models.

It is worth noting that such models still face legal compliance challenges, as the mixed structure of equity and tokens falls into a regulatory gray area in most jurisdictions, requiring project teams to carefully design legal frameworks.

However, the trend is becoming clear, and similar practices are quietly spreading, such as some projects linking unlock conditions to actual TVL (Total Value Locked), revenue, or product milestones, using executable smart contracts instead of verbal promises.

In summary, the current market is forcing project teams to abandon the old model of relying on narratives to inflate valuations, shifting towards verifiable mechanisms like revenue sharing and equity exchange to anchor value. This may become standard in the next bull market.

Of course, a bear market also means that short-term price performance is likely to be flat or even decline, and insufficient liquidity can easily lead to price drops, increasing team morale issues and fundraising difficulties.

Beyond innovations in token economics, project teams still need to continuously invest in product development and community maintenance.

For Investors and VCs: Return Elasticity and Longer Due Diligence Cycles

For VCs and institutional investors, the valuations of TGE in a bear market are significantly compressed. Historical data shows that projects entering during a bear market have a much higher return elasticity in the next bull market compared to those entering at high points during a bull market; however, the proportion of projects ultimately achieving positive returns is lower, as the bear market is also the period with the highest failure rates.

This has led to a noticeable tightening of institutional funds at this stage, with extended due diligence cycles and a preference for concentrating resources on a few projects with real usage and healthy tokenomics rather than casting a wide net.

For Retail Investors: Liquidity Traps and Longer Emotional Tests

For retail investors, the environment for TGE in a bear market is even more complex. The market lacks FOMO, reducing the chances of being harvested by overvalued projects; however, extremely low liquidity can cause price discovery mechanisms to fail, and small selling pressure can trigger severe volatility.

A recent example is Flying Tulip. This project had the endorsement of Andre Cronje (a well-known developer in the DeFi space, known for projects like Yearn Finance and Fantom) and featured an innovative design aimed at achieving "never breaking" through a 100% principal redemption mechanism, garnering significant attention at launch. However, it quickly fell below its public offering price after going live.

This exemplifies how, in a low liquidity market, even innovative mechanisms struggle to withstand selling pressure.

Retail investors participating in TGE during a bear market often face longer periods of price fluctuations and emotional tests, requiring a higher standard of judgment regarding the project's fundamentals.

Conclusion

Ultimately, the timing of TGE is far less important than project quality.

What is more thought-provoking is that in the current bear market, characterized by liquidity exhaustion and increasing regulatory clarity, the concept of timing itself is being redefined. The previous model of quickly harvesting based on bull market FOMO and high FDV narratives has been repeatedly punished by the market.

When buying pressure disappears and selling pressure amplifies, the only things that can endure are real demand and verifiable token economics.

For ambitious project teams, this presents a strategic window of opportunity: lower costs, weaker competition, and concentrated attention can be leveraged to anchor valuations, filter communities, and refine products in healthier ways.

For investors and retail participants, the core question is no longer "When to TGE?" but rather how to identify quality projects and maintain clarity and patience in a volatile market environment.