Research Summary
The report reveals that over 50% of all cryptocurrencies have failed since 2014, with the highest failure rate observed during the 2020-2021 bull run. The ease of deploying tokens and the rise of memecoins contributed to this high failure rate. The year 2021 was the worst for project launches, with over 70% of cryptocurrencies failing.
Key Takeaways
High Failure Rate of Cryptocurrencies
- Over 50% Failure Rate: The report indicates that more than half of all cryptocurrencies have failed since 2014. Out of over 24,000 cryptocurrencies listed on CoinGecko, 14,039 have failed.
- 2020-2021 Bull Run: The highest number of cryptocurrency failures occurred during the 2020-2021 bull run. Out of the 11,000 cryptocurrencies listed during this period, approximately 70% have shut down.
Worst Year for Cryptocurrency Launches
- 2021 Launches: Cryptocurrencies launched in 2021 have suffered the most, with 5,724 out of over 8,000 listed on CoinGecko having failed. This represents a failure rate of over 70%, making 2021 the worst year for project launches.
Decrease in Failure Rate in 2023
- 2023 Launches: The report shows a significant decrease in the failure rate of cryptocurrencies launched in 2023. Out of over 4,000 cryptocurrencies listed, only 289 failed, representing a failure rate of less than 10%.
Reasons for Cryptocurrency Failures
- Memecoin Popularity: The rise in popularity of memecoins and the ease of deploying tokens contributed to the high number of failed projects during the 2020-2021 period. Many memecoin projects launch without a product and are often abandoned shortly after.
- Deactivation Criteria: Cryptocurrencies may be deactivated and delisted from CoinGecko due to lack of trade activity, being revealed as a scam, or when the project team disbands, rebrands, or shuts down the project.
Actionable Insights
- Examine Project Viability: Investors should thoroughly examine the viability of a cryptocurrency project before investing, especially those launched during a bull run, as these have shown a high failure rate.
- Consider Year of Launch: The year of launch appears to significantly impact the success of a cryptocurrency. Investors may want to consider this when evaluating potential investments.
- Be Wary of Memecoins: The report suggests caution when investing in memecoins, as many of these projects are abandoned shortly after launch.
