Since its inception, the cryptocurrency market has witnessed a considerable number of projects that failed. From 2014 onwards, more than 24,000 cryptocurrencies have been listed, with 65% of them classified as ‘dead’ or failed, says a new report.
In 2023, 65% of crypto projects died.
Check out the full report on https://t.co/B0C756VpQS pic.twitter.com/SMWTLypl8J
— BitKE (@BitcoinKE) March 16, 2024
During the latter part of 2022, the cryptocurrency market underwent a notable downturn, resulting in the failure of 65% of all projects within the sector.
The period spanning 2020 to 2021, characterized by a bullish trend in the cryptocurrency market, witnessed the highest number of failures, with 7,530 cryptocurrencies launched during this timeframe failing to survive.
According to the report, 72% of crypto projects born in the 2020-2021 bull run have died.
2023 was found to be the most difficult year since 2020, with nearly 60% of the cryptocurrencies that failed doing so during this timeframe. In total, the study revealed that by 2023, 65% of cryptocurrency projects had ceased to exist, earning the label of ‘deadcoins.’
2023 is the toughest year in the 2020-2023 cycle, with nearly 60% of dead coins disappearing during that periodIt was observed that the Terra and Cardano ecosystems encountered the highest rates of project failures. To categorize projects as deadcoins, researchers employed a set of criteria, including:
- Low trading volume and liquidity
- Inactive or deleted Twitter accounts
- Websites that were no longer operational
The impact of major bankruptcies during the bear market in the crypto world is profound. After the Terra crash, for example, 35% of crypto projects were deemed defunct. Furthermore, the downfall of FTX, a leading crypto exchange, resulted in the closure of 32% of crypto projects.
More specifically, sectors such as Video & Music have experienced a 75% death rate, showcasing a pattern where crypto projects targeting specific niches struggle to maintain sustainability. 75% of Asset-backed stablecoins have also faced failure, indicating vulnerability in the bear market.
Additionally, Metaverse projects have also encountered a high rate of dead coins, with more than half (51%) becoming dead. This shows how vulnerable what was once a huge trend in the crypto world is.
The average lifespan of crypto projects is 3 years, which means an average project can barely survive through a market cycle of 4 years.Moreover, even with prominent backing, success cannot be guaranteed in the ever-changing world of crypto:
“Half of the projects backed by the bankrupt Three Arrows Capital have failed. Other top-tier VCs with over half of their projects in their portfolio having died include: Paradigm, DWF Labs, Polychain Capital, a16z, Animoca Brands, Binance Labs, and Multicoin Capital.”
– Alpha Quest
Chains with the largest number of dead coins includes:
* Cardano – 74%
* NEAR – 63%
* Celo – 61%
* Harmony – 56%
* Cosmos – 56%
Other industries with huge number of dead coin projects includes:
- Sports – 74%
- Filesharing – 74%
- Agriculture – 72.5%
- Health – 72%
- Adult – 71%
- Storage – 71%
- Communications & Social Media – 71%
- Oracles – 65%
- ZK Proofs – 65%
- Real Estate – 62%
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