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More than 8K cryptocurrencies were listed on the CoinGecko pricing site during the bull market of 2021, although more than 3.3K or nearly 40% of them have since been deactivated and delisted due to one of the worst downturns the industry has ever seen.

That’s 2.5 times the number of tokens listed in 2020 that ultimately failed, aka “dead coins,” and 3.5 times the year-over-year rate, wrote Julia Ng, who runs CoinGecko. growth marketing. published on November 29.

“During this period, many cryptocurrency projects, tokens and coins were launched by various anonymous developers with little value or any immediate or discernible purpose,” Ng noted. “Few were actually committed to their projects, leading to a high failure rate and thus their eventual demise.”

The global crypto market cap was just $866.4 billion after peaking at nearly $3T in November 2021, according to CoinMarketCap data. A sharp drop in the value of cryptos over a short period of time does not necessarily reflect any fundamental or structural change in the blockchain ecosystem that has taken effect, just as the performance of the stock market does not always reflect the health of the economy.

Bitcoin (BTC-USD), a key gauge of cryptocurrency and broader risk tolerance, traded at $17.8K on Wednesday afternoon, well below its November 2021 all-time high of $68.9K. That’s a peak drop of over 70%. Many major symbols reflected BTC’s volatile path, as seen in this chart.

Based on CoinGecko’s methodology, cryptos may be removed from the site due to a lack of trading activity in the past two months. The token may also be removed if the projects are found to be fraudulent or if the projects require deactivation.

“Excluding the anomaly year of 2021, an average of 947 listed cryptocurrencies are dead and ending in failure over the past five years from 2018 to 2022,” Ng noted.

Tony Saliba, CEO of crypto-trading technology provider Liquid Mercury, cited previous crypto market cycles where a large number of projects launched tokens that ended after a wild run of failure.

“This pattern played out during the last cycle, when many projects flipped on the back of a strong bull market in 2017, creating an ICO-driven boom in altcoins, and many of these tokens fell to zero in 2018 and 2019 as bitcoin prices, ether, etc. fell.” he said in an emailed statement to Seeking Alpha.

“You have to have substance behind the product, a team that knows how to run a business, and more to have a fighting chance as a startup, so the ebb and flow of token listings over market cycles is likely to persist into the future. “.

Seeking Alpha investor Anna Sokolidou labeled bitcoin as “highly volatile and unpredictable,” advising conservative investors to look elsewhere in 2023. Otherwise, see why SA partner The Digital trend thinks Katie Wood’s $1m Bitcoin prediction ‘could be right’.

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