In-depth Analysis Reveals Over 50% of Cryptocurrencies Have Failed
A recent report by CoinGecko has provided alarming insights into the world of cryptocurrencies. The analysis reveals that more than half of the 24,000 cryptocurrencies listed on the platform since 2014 have met their demise. This means that a staggering 14,039 digital currencies are now considered “dead” or “failed” due to either prolonged inactivity or a lack of viability as effective mediums of exchange.
2021 Cryptos Face Market Turmoil and High Failure Rate
The report highlights the challenges and uncertainties faced by the cryptocurrency market, with a notable correlation between bull runs and project failures. During the boom of 2020-2021, when prices soared and speculation ran high, 7,530 coins (representing 53.6% of all failed coins) succumbed to subsequent corrections.
This period also saw the rise and fall of meme coins, which lacked strong technological foundations and clear use cases.
Of all the cryptocurrencies introduced in 2021, 5,724 are now considered dead. This makes it the worst year for project launches, with over 70% of listed coins failing. The failure rate for cryptocurrencies listed in 2022 stands at around 60%, with 3,520 already crashed.
However, there is a glimmer of hope in the data for 2023. Only 289 out of over 4,000 coins listed have failed so far, reflecting a failure rate of less than 10%. This may indicate a shift towards stronger projects and more thorough research from investors.
Investors Prioritize Strong Crypto Projects
The positive trend observed in 2023 can be attributed to factors such as a focus on well-structured projects with solid value propositions and a more mature investor base conducting thorough research and due diligence.
The CoinGecko report also identifies key reasons for cryptocurrency deactivation. Prolonged inactivity exceeding 30 days is the top reason, followed by media reports or evidence of scams and fraudulent activity. Dissolution of project teams, rebranding efforts, and rendering tokens unusable are also cited as factors.
A Cautionary Tale for Investors
The high failure rate of cryptocurrencies serves as a warning to investors navigating the volatile cryptocurrency market. Thorough research and careful evaluation of individual projects become imperative in order to make informed investment decisions.
Featured image from Shutterstock
Hot Take: More Than Half of Cryptocurrencies Have Failed, Reveals Report
A recent comprehensive analysis by CoinGecko has unveiled disconcerting insights into the fate of cryptocurrencies. The report reveals that over 50% of the 24,000 listed cryptocurrencies have met their demise since 2014. This alarming number highlights the challenges and uncertainties in the market, with a clear correlation between bull runs and project failures.
However, there is hope for stronger projects as the failure rate for coins launched in 2023 stands at less than 10%. This positive trend may be attributed to a shift towards well-structured projects and more thorough research by investors.
Investors must exercise caution and conduct extensive research before investing in cryptocurrencies due to their high failure rate. Thorough evaluation of individual projects is crucial to navigate the volatile market successfully.
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