‘Existential’ token problem seen as supply outpaces value creation
Blockworks’ Michael Ippolito sees surge in token supply diluting returns, breaking the link between fundamentals and price while raising concerns about crypto’s long-term model.
The rapid growth in the number of crypto tokens is outpacing the value they generate, creating an “existential” problem for the industry, according to Michael Ippolito, co-founder of Blockworks.
In a series of posts on X, Ippolito noted that while total crypto market capitalization remains relatively strong, the average value per token tells a different story. “The average coin is only slightly higher than where it was in 2020 (!) and down ~50% since 2021,” he wrote.
Median token returns have also deteriorated sharply. Most tokens are down roughly 80% from their highs, suggesting that gains have been concentrated in a narrow set of large-cap assets, while the broader market underperforms, Ippolito claimed.