- Between 2013 and 2022, 2,383 crypto coins failed.
- Lack of demand for tokens was identified as the primary reason for failure.
- Fraudulent and scam projects were the second most significant cause of failure.
Coin Kickoff, as cited by a report from The Ascent, a Motley Fool service, revealed that from 2013 to 2022, 2,383 cryptocurrency coins experienced failure. The average lifespan of these projects was a mere 15 months, highlighting the challenges faced by many early ventures in the industry. However, a closer look at the numbers reveals an intriguing trend.
A lack of demand for tokens was identified as the primary reason for failure, with many projects failing due to a lack of clear use cases or utility. Two-thirds of the failed coins were abandoned, underscoring the importance of developing practical cryptocurrency applications.
Unfortunately, according to Coin Kickoff, fraudulent and scam projects were the second most significant cause of failure. These deceptive ventures promised remarkable returns or claimed to revolutionize the industry, only to become Ponzi schemes. OneCoin, for example, duped investors out of a staggering $4 billion.
Nevertheless, there is cause for optimism. The data shows a declining failure rate for newly launched coins, indicating the industry’s increasing maturity. From 2013 to 2017, over half of all new crypto coins failed, with 2014 being the worst year, seeing a failure rate of 76.5% among the 793 coins released.
However, since then, the failure rates have steadily decreased. In 2018, although the number of failures peaked at 751, the proportion of dead coins dropped to 27.62%. This trend continued, with 2019 and 2020 recording failure rates of 4.74% and 1.03%, respectively.
Despite the number of failed coins increasing slightly to 83 in 2022, the failure rate hit an all-time low of 0.06%. These statistics paint a picture of a more stable and mature industry, where investors are growing wiser to potential scams.
As newer projects establish themselves more securely, the crypto industry is entering a new era where innovation and stability go hand in hand. This shift signifies an exciting time for crypto enthusiasts and investors alike as the market continues to evolve and pave the way for a more sustainable future.
In this era of crypto maturity, it becomes increasingly crucial for investors to conduct thorough research and exercise caution when entering the market. By learning from past failures and embracing the potential of the present, individuals can navigate the crypto landscape with greater confidence and seize the opportunities that lie ahead.