Experts weigh when crypto buybacks actually support token value and when they fail
Token buybacks are regaining attention in the crypto sector, but recent experiences highlight that execution, scale, and market conditions determine their effectiveness. In 2025 alone, crypto protocols spent over $1.4 billion on buybacks, yet many tokens remained flat or declined, raising questions about the strategy’s impact on long-term value.
Why Buybacks Often Fail to Move Prices
Analysts attribute weak results to insufficient scale relative to selling pressure. Daily trading volumes can far exceed buyback amounts, particularly during vesting unlocks or token emissions. Timing also plays a role: buybacks executed during high price periods or without sustained supply reduction often provide only temporary price bumps. Furthermore, most tokens lack direct claims on protocol revenue, making buybacks a limited tool for linking performance to holder value.
Solana-based DEX aggregator, is also rethinking that;
Buybacks work best for protocols with strong usage, stable revenue, and sufficient treasury capital. Programs that are predictable, rules-based, and paired with genuine demand or supply reduction tend to inspire more investor confidence. Effective buybacks are often complemented by product development, ecosystem growth, and disciplined emissions, rather than serving as a substitute for them.
When Buybacks Should Be Avoided
Buybacks can backfire if a project’s runway is short, fundamentals are weak, or token demand is speculative. Mis-timed programs may erode capital needed for growth, signal weak adoption, and undermine credibility with long-term holders. Experts emphasize prioritizing investment in high-return opportunities before deploying treasury funds for buybacks.
In 2026, buybacks are expected to continue but in a more disciplined, data-driven form. Hybrid approaches combining buybacks with staking, burns, or revenue sharing are likely to emerge, linking tokenholder value more directly to protocol performance and long-term sustainability.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.