Thousands of coins listed during the crypto boom have died

The heyday is over for crypto producers. At least crypto coins and tokens seem to keep dropping like flies.

Data collected by crypto aggregator CoinGecko shows that nearly 1,900 crypto projects listed on the site in 2022 have already failed.

New cryptos are dying

Data aggregator CoinGecko is often used to track cryptocurrencies. It defines a “dead coin” as one that has seen no trading activity in the past two months, has been expelled as a scam, or has requested removal from the CoinGecko database.

As of mid-March, CoinGecko reports that 1,866 of the 6,300 cryptos it listed in 2022 are already classified as dead. This graveyard of cryptos adds an astounding 4,367 crypto projects that were listed in 2021 and have since died.

Despite the huge number of cryptos that have disappeared, 2021 was a boom time for the market. Speculative investments like meme stocks took off in early 2021, thanks in part to a massive increase in government spending and weak interest rates. Cryptocurrency was one of the biggest beneficiaries of this trend. During that year, the market capitalization of the industry rose from $965 billion to as much as $2.6 trillion, according to a Morningstar analysis of data from CoinGecko.

Driving much of this growth was the money pouring into coins like Dogecoin and other trendy, dubious crypto investments like the Omicron token – as well as the biggest cryptos, like bitcoin and ether. Unlike other speculative investments, meme cryptos were essentially created as a joke and mostly sought to serve no purpose other than to ebb and flow in price. They are often driven solely by internet hype, and their breakneck upward momentum caused some investors to pile in simply for fear of missing out on an “easy” win.

The success of the industry led others to try to emulate the success of these assets by creating their own tokens. Some of these assets have been successful. Others…not so much. With 1,866 dead cryptos out of 6,300, around 30% of all cryptos listed by CoinGecko last year have perished.

What does this mean for investors?

There is a credibility concern in cryptocurrency, due in part to both a high volume of fraud, the collapse of several major crypto firms, and the influence meme cryptos have over investors. As CoinGecko’s report shows, many coins continue to live and die in very short cycles.

The failure of so many projects in the past year is more proof that the market cannot always be carried by hype. If you are interested in investing in crypto, remember that speculative assets such as meme coins and tokens that are launched are not traded on basis.

The roller-coaster-like price movements of cryptos are difficult to predict, and – as the report shows – there is no guarantee that they will survive. Experts have said investing in the more familiar tokens when starting out, such as bitcoin and ether, may be the way to go.

And it’s important to remember that as exciting as crypto’s price ups and downs can be, crypto is generally a risky asset class. Financial advisors tend to recommend not putting money into crypto that you are not willing to lose.

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