High Failure Rate of Digital Coins Since 2021: Whys and Whats
Cryptocurrency collapse: Nearly half of all created digital currencies have ceased to exist.
In today's dynamic digital world, the high failure rate of new cryptocurrencies since 2021 is a stark reality. Here's a breakdown of the primary factors contributing to this market phenomenon:
- Market Oversaturation and Speculation: The explosion in the number of cryptocurrencies from approximately 428,383 in 2021 to a staggering 7 million by 2025 has led to a saturated market, filled with tokens lacking intrinsic value or solid backing[2][4].
- Flimsy Tokenomics: Countless tokens have entered the market without robust economic models or strong tokenomics, leading to a lukewarm market reception and, ultimately, failure[2].
- Economic Instability and Regulatory Uncertainties: Economic downturns and regulatory uncertainties have dented the overall crypto market, inducing failures[4][5].
- Easy Token Creation Platforms: Platforms like pump.fun have democratized token creation, making it a cinch for individuals with little technical know-how to launch tokens. However, this ease of entry has led to an influx of low-quality, non-viable projects plaguing the market[4].
The Role of Pump.fun
Pump.fun has played a pivotal role in this trend, making it easier for people to mint tens of thousands of "meme coins" or "ghost tokens," which typically offer minimal utility and may be abandoned shortly after launch. The vast quantity of inactive or "dead" tokens arises due to a lack of usage, liquidity, or community support[4].
Numbers Crunching
- Total Failed Projects: An alarming 3.6 million cryptocurrencies have flopped since 2021, with most failures happening in the recent past[4][5].
- Q1 2025 Failures: The first quarter of 2025 saw an astounding 1.8 million tokens crash, underscoring a sharp uptick in failures compared to preceding years[5].
- Failure Rate: The failure rate of listed cryptocurrencies has ballooned to around 53%, underscoring the volatile and crowded nature of the market[2][3].
In essence, the crypto market is a volatile playground marred by failed projects. Nonetheless, the resilience of the market and its innovative potential are undeniable, offering keepers of the cryptocurrency realm ample opportunities for growth and success.
[References]1. CoinGecko Statistics2. Investopedia: What You Need to Know About Cryptocurrency3. Forbes: The Real Reason Why Cryptocurrencies Fail4. CoinTelegraph: Pump.fun Leads to More Failed Cryptocurrencies5. Inside Bitcoins: Cryptocurrency Market Crash of 2024: What Went Wrong?
- Nearly half of the listed cryptocurrencies have failed since 2021, demonstrating the volatile nature of this market.
- In 2021, the number of new cryptocurrencies exploded, leading to market oversaturation and speculation, contributing to the high failure rate.
- The easy creation of tokens through platforms like pump.fun has resulted in an influx of low-quality, non-viable projects, playing a significant role in the high failure rate of digital coins.
- Aggregating finance and investing technology have not been enough to safeguard cryptocurrencies from failure, with economic instability and regulatory uncertainties also playing a role in the high failure rate since 2021.
