According to CoinGecko, the majority of cryptocurrencies that have ever entered the market have ceased to operate. Let's delve into the reasons.
More than half of the cryptocurrencies ever introduced to the market have died. This conclusion is drawn from the statistics published by the analytical platform CoinGecko.
Since 2014, CoinGecko has added just over 24,000 cryptocurrencies and tokens. Of these, 14,039 have died and been delisted from the platform. It is worth noting that adding assets to CoinGecko is significantly easier than on other major crypto exchanges, and to be delisted from this platform, and one must make a considerable effort. Delisting occurs only in cases of proven fraud or if there have been no transactions with the coin for 30 days. Therefore, according to CoinGecko, many tokens that are still alive are essentially more likely dead.
However, besides the rather obvious fact that most cryptocurrencies and tokens fail (here, the blockchain industry is no different from any other sector), there is something much more interesting in the data published by CoinGecko. The overwhelming majority of "dead" currencies were launched in 2021 and 2022 (5724 and 3520, respectively). A whole range of reasons causes this:
- The sharp simplification of creating, deploying, and bringing new tokens and coins to the market has led to a sharp increase in new digital assets.
- Another surge in the popularity of meme coins has increased the number of completely useless and meaningless currencies.
- During the NFT boom, many collections were released, and their creators often released proprietary tokens as well.
- The key point is that 2021 was another "bull market" period when Bitcoin and the cryptocurrency market as a whole once again reached historic highs. In 2022, developers attempting to "jump on the last train" introduced coins to the market as it was leaving.
A similar situation occurred in 2017–2018. During that period, we witnessed a mass issuance of coins and tokens amid an already declining market and the creation of dozens of meme tokens. The results were similar—over 70% of assets died due to the ICO market crash. Simply put, the overall number of coins and tokens was much lower than in 2021–2022.
In other words, most cryptocurrencies and tokens were created solely to make quick and easy money in a "bull market." The standard behavior model was to attempt to profitably sell one's token, after which developers would either abandon the project or scam it and disappear into the sunset with the funds. Most of these developers never considered their projects' development and prospects.
However, not everything is so gloomy. Coins and tokens that have been trading on the market for 3–4 years (and are still alive) are worth taking a closer look at. They clearly have value and were not created solely to make money from inexperienced people.