Why VC tokens like THE are constantly falling in price: analysis of mechanics and risks

Over the past few years, investors have been encountering a phenomenon often referred to as VC currency. This refers to tokens backed by venture capital firms. Despite attractive packaging and loud promises, most of these assets demonstrate a disappointing dynamic. Let’s take a specific example: THE (Thena), currently priced at $0.26 with a 1.08% decline over the last 24 hours, which clearly illustrates the issues with VC tokens in the market.

THE as a Typical Example of an Unsuccessful VC Currency

THE is an ideal case for analyzing the typical behavior of a VC asset. The project was positioned as an ambitious solution with real use cases, attracting the attention of many well-known funds. However, after launching on exchanges, the dynamics proved to be disappointing. The price steadily declines, and trading volumes remain modest, which is characteristic of most VC tokens.

Three Key Characteristics of VC Tokens That Hide the Danger

Venture tokens possess specific traits that distinguish them from other assets:

Impressive facade but weak substance. Unlike meme coins, VC currencies are presented as serious projects with real potential. This creates a false impression of long-term value, attracting inexperienced investors.

Reputable background as a marketing tool. The project is backed by major investment funds, which is used as a primary argument to attract capital. The reputation of investors becomes a tool for manipulation.

Low liquidity amid inflated valuation. In the early stages, actual trading volume is minimal, but market capitalization is artificially inflated, creating an illusion of the project’s value.

Unlocking Mechanism: How Tokens Create Price Pressure

This is where the main danger lies. For THE, 940,000 tokens are unlocked every week. Early investors acquired these tokens at prices many times lower than current quotes. After unlocking, they sell their positions en masse, exerting constant downward pressure on the price.

This process has a long-term effect: until the entire unlocking period (vesting period) ends, the project has little chance of recovery. Each week brings a new wave of sales, which accumulates and suppresses any growth attempts.

Why Ordinary Investors Lose on VC Currencies

The asymmetry in this scheme is obvious. Venture firms bought tokens at the earliest stages at prices 10-100 times lower than current levels. They have already realized profits or are about to do so. Retail investors, on the other hand, often enter the project at the hype peak, paying the maximum prices.

The predictable result: when unlocking begins, ordinary traders incur losses. Moreover, these tokens drain liquidity from the market, negatively impacting the trading of quality projects.

Why Exchanges Continue Listing VC Tokens

Paradoxically, exchanges actively list such assets despite the negative outcomes for most traders. The reason is simple: listing brings commissions, and cooperation with VC funds opens new business opportunities. Thus, in pursuit of profit, exchanges become complicit in extracting capital from retail investors.

How to Protect Your Capital from the VC Trap

Investors should develop critical thinking regarding any VC project. It’s important to study the token unlock schedule—if there are large volumes scheduled to be released in the coming months, that’s a red flag. Overvaluation combined with low trading volumes is another sign of trouble.

Summary

The essence of VC currencies is a simple scheme: investors acquire a huge amount of tokens at low prices early on, then create an illusion of value through marketing, and when unlocking begins, they sell off their positions en masse. Ordinary investors often end up at the final stage of this cycle, becoming victims of a profitable mechanism for venture funds. Vigilance and analysis of vesting schedules are essential tools to avoid losses on VC tokens.