Oftentimes, crypto tokens and cryptocurrencies are used interchangeably. However, both of them vary greatly in their functionality though both of them run on the blockchain. Cryptocurrencies are similar to fiat currencies that we use to buy assets or invest. Whereas crypto tokens refer to assets that are stored digitally.
The main use case of crypto tokens is that they are used in crowdfunding. Any blockchain project that needs funds for further improvement can list the project on the crowdfunding platform and sell the tokens so that investors will buy those tokens and invest in the project.