In a recent comprehensive analysis of the cryptocurrency landscape, a report from Coingecko revealed disturbing insights into the fate of digital currencies, showing that more than 50% of the 24,000 digital coins listed on the platform since 2014 have died.
This equates to 14,039 cryptocurrencies being labeled “dead” or “failed” due to either long-term inactivity or an inherent lack of viability as an effective medium of exchange.
Market turmoil: Cryptocurrency faces demise in 2021
The report paints a vivid picture of a challenging and uncertain market, with a significant correlation between bull runs and project failures. The exuberant price surge and speculative enthusiasm during the 2020-2021 boom resulted in the highest number of casualties, with 7,530 tokens (53.6% of all failed tokens) disappearing in the subsequent correction.
This period also saw a proliferation of memecoins, characterized by a lack of solid technological foundations and clear use cases, leading to their rapid rise and subsequent fall.
As of January 2024, 5,724 have died, with cryptocurrencies launched in 2021 performing the worst. 2021 was the worst year for project launches, with over 70% of cryptocurrencies on Coingecko dying.
Next are the cryptocurrencies listed in 2022; 3,520 of them have crashed, for an accident rate of about 60%.
289 currencies listed by Coingecko disappeared in 2023. More than 4,000 currencies were listed, and the failure rate was less than 10%, a significant drop from previous years.
Amid this sobering assessment, a silver lining emerges in the data for 2023. The failure rate for tokens issued this year is significantly lower than 10%, with only 289 out of more than 4,000 tokens failing so far.
Investors Adapt: Favor Stronger Crypto Projects
This positive trend can be attributed to a number of factors, including a potential shift towards better-structured projects with stronger value propositions, and a sophisticated investor base that engages in more thorough research and due diligence.
The report points to several key reasons for cryptocurrency deactivation on the CoinGecko platform. Prolonged periods of inactivity, exceeding 30 days, top the list, followed by media coverage or credible evidence of scams or fraudulent activity.
Additionally, the disbanding of a project team, rebranding efforts, or rendering a token unusable are also considered factors that warrant deactivation.
Ultimately, CoinGecko’s report serves as a wake-up call for investors navigating the turbulent waters of the cryptocurrency market. With failure rates so high, the need for thorough research and astute evaluation of individual projects becomes apparent. #Coingecko #代币消亡