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According to CoinKickoff, more than half of all coins introduced annually between 2013 and 2018 are no longer in circulation.
To put it mildly, Crypto had a challenging year in 2022.
According to a recent assessment based on a decade’s data, the long-term survival of the practices that survived this year, if not unblemished, remains in question.
More than 90% of the digital assets created since a previous meltdown in 2014, according to research collated by educational platform CoinKickoff, have subsequently been abandoned by both investors and creators.
Aproximately 793 new tokens entered the market by the end of the following year, following the bitcoin boom in 2013, when the cryptocurrency soared from $150 to a November peak of $1,000.
CoinKickoff research indicates that declining trading volumes or even complete abandonment are the main causes of the eventual demise of most newcomers. One notable exception, the meme currency dogecoin, is still around.
According to a report from the research platform, “many opportunistic attempts to corner the early crypto market ended in failure.” According to Coinopsy’s data, which tracks “dead coins,” digital assets typically have lifespans of only 15 months or less.
According to CoinKickoff, more than half of all coins introduced annually between 2013 and 2018 are no longer in circulation.
Dead coins, according to Coinopsy, are digital assets that have been used in frauds, have undergone protracted outages on related websites or nodes, lack social media updates, or have minimal transaction volume.
Naturally, the ICO age followed, and in 2017 it all but replaced digital assets. Additionally, bitcoin hit fresh record highs near $20,000 at that moment. And over those 365 days, fraudsters came out of hiding on the internet.
The largest percentage ever recorded of newly generated coins that year, 17 % turned out to be fraudulent (usually produced to “pump the bags” of their maker).
Comparatively, 9.6% of newly generated currencies in 2018 were intended to defraud investors, compared to around 10% of all coins issued in 2015, according to statistics.
The good news is that just 16 of the cryptos that were launched in 2020 have since failed, which may be a sign that the sector is maturing.
In support of that claim, trademark lawyer Mike Kondoudis discovered that from 2021 to 2022, there was a 50% increase in the number of recent US crypto trademark applications, reaching 5,383. The picture is not entirely complete.
There are already more than 12,000 different cryptocurrencies available. Most, according to history, are doomed to fail or disappear. The longevity of the asset class has been demonstrated by bitcoin’s resilience over time, yet there are still considerable investment risks.
Regulation tends to get stricter in each consecutive down market brought by by a major event, as witnessed in 2022 with FTX, Three Arrows Capital, and crypto lenders.
Due to a more stringent regulatory environment in the US and throughout the world, as well as prosecutors and securities regulators intensifying their examination of such techniques, the majority of projects now avoid launching an ICO and instead choose alternative methods to collect cash.
While exchanges have had to clear obstacle after hurdle to establish their authenticity and profitability when it comes to selling tokens for the first time, US prosecutors have started to target bad actors, fraudsters, and hackers more frequently.
Although dead coins are always a threat to any investor’s portfolio over time, the regulation of cryptocurrencies is gradually shifting. However, a rising number of advocates for digital assets have recently started calculating the possibility of such incremental adjustments increasing from zero to sixty.
