The Four Major Illusions of Breaking New Encryption Projects: The Truth Revealed by Data

In the cryptocurrency space, people often have many inherent beliefs about the launch strategies of new projects. However, a comprehensive study on 40 major token launches in 2025, analyzing 50,000 data points, produced some unexpected results. This study revealed that some widely held views are actually incorrect.

Misconceptions about Participation

Many project teams are keen to pursue various metrics on social media, such as likes, shares, replies, and exposure. They invest a significant amount of money in participatory marketing, task platforms, and buying followers. However, research shows that these metrics have almost no correlation with token price performance.

Regression analysis shows that the correlation coefficient R² between the engagement metrics and price performance is only 0.038. In fact, likes, comments, and shares show a slight negative correlation with price performance. This means that projects with higher engagement sometimes perform worse.

The only weak positive correlation observed is with the number of retweets in the week before the release, but the correlation is also weak. This suggests that spending a lot of money on so-called "engagement" may be an ineffective investment.

The Myth of Low Circulation

Many people believe that issuing tokens with a very small circulating supply can create artificial scarcity, thereby driving up prices. However, research data shows that the percentage of initial circulating supply relative to total supply does not have a significant correlation with price performance.

What really matters is the dollar value of the initial market capitalization. Data shows that for every 2.7 times increase in initial market capitalization, the price performance in the first month tends to decrease by about 1.56%. This relationship is so close that it can almost be considered a causal relationship.

The Illusion of Venture Capital Support

The common view is that obtaining large financing from well-known venture capital will lead to a surge in token prices. However, research data shows that there is actually no statistically significant relationship between the amount of financing and token performance.

The more funds raised, the higher the valuation usually is, which means there is a greater need to overcome selling pressure. Additional funds do not automatically translate into better token performance.

Misunderstanding the Timing of Speculation

Traditional views suggest that important announcements should be saved for the project launch week to create the maximum "FOMO" atmosphere. However, the data shows that the opposite is true.

Research has found that projects that can consistently maintain good performance often establish their reputation before the launch week. They understand that the attention before the launch can attract real buyers, while the attention during the launch week often only brings temporary hype.

Truly Effective Methods

Since the above traditional views have been proven wrong, what is truly important?

1. Actual product utility: Projects that can naturally generate content perform better because their products can continuously create valuable content.

2. Trading retention rate: Tokens that can maintain trading volume after the initial hype tend to perform significantly better in price.

3. Reasonable initial market value: This is the strongest predictive indicator of success. Projects that go public at a reasonable valuation have more room for growth.

4. Authentic Communication: A consistent tone that matches the product, along with sincere and straightforward updates, often leads to better results.

Why do these misunderstandings occur?

This cognitive bias is not malicious, but rather stems from structural issues within social media. These platforms often reward engagement over accuracy. Attention-grabbing content is more likely to attract attention than real data.

In addition, many so-called experts have actually never issued tokens in person. They are merely commenting on a process they have never personally experienced.

Practical Approaches of Successful Projects

According to the data, successful projects typically follow these principles:

• Focus on building products that people truly want to use.
• Reasonable pricing at the time of token issuance
• Communicate sincerely with the audience
• Focus on the truly important metrics rather than superficial social media data.

Taking a certain network as an example, they focused on technical explanations and educational content, resulting in a 150% increase in the first week after launch. This was not because they had a massive fan base, but because they genuinely inspired people's interest in their innovations.

In contrast, projects that invest heavily in task platforms and participatory marketing often perform poorly due to a lack of genuine understanding and attention towards their tokens.

Ironically, while many try to cater to social media algorithms, it is the projects that quietly build useful products and publish wisely that truly succeed. Transparency and a focus on product-driven content strategies often lead to sustained good performance.