Study Reveals That Prioritizing Market Cap and Volume Over Engagement Leads to More Successful Token Launches

New Study Finds Token Launch Success Hinges on Fundamentals Over Hype

In a crypto market driven by memes and influencer threads, a new study from Simplicity Group reveals that the true determinants of a successful token launch lie in market fundamentals, not social media buzz.

Analyzing over 50,000 data points from 40 token launches between January and April 2025, the report busts some of crypto’s biggest myths — and offers insights for investors navigating new tokens.

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Social Media Buzz Isn’t Everything

Contrary to popular belief, viral X posts and online engagement don’t guarantee price gains. Simplicity’s data shows no meaningful link between social media activity — like likes, replies, or reposts — and price performance one week after launch. Surprisingly, the study found a slight negative correlation between high engagement and returns after one week and one month.

“While the correlation is statistically insignificant and not necessarily causal, it’s still noteworthy,” the report said.

However, engagement levels before the token generation event (TGE) did show a positive connection to one-month returns, likely because broader awareness helps sustain momentum.

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Size of Market Cap Is a Bigger Factor

The study also found a strong negative correlation between a token’s initial market cap (IMC) and its post-launch performance. Put simply: the larger the starting valuation, the smaller the typical returns.

“For every 2.7x increase in IMC, there’s an average 1.37% drop in one-week returns and a 1.56% drop in one-month returns,” the researchers explained.

While traders often focus on the size of the circulating supply (float), Simplicity’s data showed no direct impact on price performance in the first week. Instead, the total dollar value of the initial float held more weight than how much of the total supply was released at launch.

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Volume Retention Is Key

Simplicity also examined trading volumes on the TGE date and how they evolved over time. While initial trading volume alone wasn’t linked to better price action, the study revealed that volume retention is crucial.

Tokens that maintained higher trading activity one month after launch relative to their initial volumes tended to perform better, even though the relationship wasn’t perfectly linear.

“Higher volume retention signals consistent interest and community conviction,” the report noted.

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VC Money Isn’t a Silver Bullet

Another major insight: raising significant venture funding doesn’t automatically translate to better token performance.

“Having more money does not guarantee a better token,” Simplicity concluded. “The added benefits of a bigger budget don’t statistically outweigh the costs.”

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Authenticity and Product-Driven Content Win

Ultimately, the research suggests that sustainable token performance is driven by product-focused communication and genuine community engagement — not flashy marketing or viral memes.

Projects like Bubblemaps and Kaito were highlighted as examples where authentic, product-centered content led to healthier engagement and stronger price performance.

By contrast, tokens relying on generic memes or hype campaigns often saw engagement drop off quickly after their TGE, followed by weaker price trends.

Simplicity also stressed that maintaining an authentic voice and consistent communication style aligned with a project’s mission is crucial for long-term success. Transparency and regular technical updates further help build community trust and credibility.

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