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Cryptocurrency reflects a reality in its world, where projects may succeed or fail. Since 2014, over 24,000 cryptocurrencies have been listed. 65% of them are considered dead or unsuccessful. This situation is not very promising as it shows that a large portion of the projects are not viable in the long term. So, what does research say about this?
Dead Coins Peak in This Time Frame
Towards the end of 2022, the cryptocurrency market experienced a significant decline, and it was determined that 65% of all projects in the industry had failed. The bull run during 2020-2021 led to the emergence and rapid growth of many projects but also brought with it many failures.
According to CoinGecko, 53.6% of the 7,530 cryptocurrencies launched during this period ceased operations. However, it should be noted that this is only part of the picture, as research has revealed that by 2023, 65% of cryptocurrency projects had ended and were classified as dead coins.
Terra and Cardano ecosystems were observed to have the highest rates of project failure. Researchers classified projects using criteria such as low trading volume, lack of liquidity, inactive social media accounts, and non-operational websites. However, it’s important to note a significant exception to this trend: Dogecoin. Dogecoin, as a meme-based cryptocurrency, managed to maintain its presence in the market and challenged others.
Failure in Meme Coins
The popularity of meme-based cryptocurrencies and the rapid emergence of projects in this area increased failure rates. About 70% of the more than 11,000 cryptocurrencies launched during the 2020-2021 period shut down, while during a similar period in 2017-2018, this rate was around 50%.
Of the more than 3,000 projects listed during the bull run at that time, 1,450 closed, reflecting a similar failure rate. This increase is largely attributed to the simplification of the token creation process and the rise of baseless projects.
2021 and Beyond
According to CoinGecko’s data, most of the 5,724 crypto projects launched in 2021 ended in failure by January 2024. This figure exceeds 70%, representing a majority of the listed cryptocurrencies. This clearly shows that 2021 was a particularly challenging year for new crypto projects.
However, the failures do not end there. By 2023, even new cryptocurrencies bearing the marks of 2021 failed to achieve the expected success. 3,520 projects are no longer active, indicating a closure rate of 60%. These figures reflect the harsh reality of the crypto world. That is, there are as many risks as there are promised opportunities.
In 2023, however, there was a noticeable decrease in the failure rate. Like in previous years, only 10% of the more than 4,000 crypto projects launched this year failed. This suggests that cryptocurrency projects are showing improvement in sustainability and quality.
