CoinGecko Report: Over 1,500 Altcoins Failed in a Decade

In a recent analysis by CoinGecko, the volatility and risk inherent in the cryptocurrency market have been brought into sharp focus with a report revealing the staggering number of failed digital currencies over the past decade. The comprehensive study sheds light on an array of altcoins that have quietly faded from existence due to various reasons such as project deactivation, rebranding, a plunge in trading activity, or exposure as fraudulent schemes.

The numbers speak volumes: CoinGecko’s data shows that in the span of ten years, 1,546 altcoins have become defunct, which translates to an alarming 11.01% failure rate in the sector. Starting from 2014, there were 37 known coin casualties; the following year saw a slight decrease to 27, and 2016 recorded 32, marking a grim tally of 96 dead currencies over three years, a figure representing less than one percent of the total altcoins that have perished to date.

Yet, it was during the frenetic 2017-2018 bull run that the altcoin market saw an unprecedented increase in failure rates. Within this period, nearly 1,500 of the new projects launched ultimately folded. Out of more than 3,000 cryptocurrencies listed, roughly 70% failed—mirroring the overall failure rate CoinGecko identified.

The pattern of failure has largely been consistent in the following years. In 2019, the count of failed currencies jumped to 1,150, indicating a 50-unit increase over the previous year. The heaviest losses, however, occurred during the 2020-2021 market explosion. According to the report, of the over 11,000 cryptocurrencies listed in that period, an overwhelming 70% have ceased operations, signaling the volatile nature of such investments.

The gravest year for cryptocurrency ventures turned out to be 2021, with a staggering 5,724 projects turning up as dead coins—this represented the highest single-year failure rate, with over 70% of the year’s listings succumbing.

CoinGecko ascribes this spike in defunct projects to the relatively low barriers to entry for creating new tokens and the surging popularity of memecoins, which often lack a foundational product and are frequently abandoned soon after their conception.

In a slight shift of momentum, 2022 brought in a reduction in failed projects with 3,520 dying—a failure rate of 60% against the total listed. Continuing this modest improvement, 2023 has so far experienced fewer collapses, with only 289 out of over 4,000 listed cryptocurrencies sinking, putting the failure rate at less than 10%.

Despite this declining trend, caution remains paramount as the sector’s nature is unpredictable. With 289 failed projects in 2023 alone, the ongoing stability of cryptocurrency ventures is not guaranteed and requires vigilant scrutiny. As the industry continues to evolve, market participants await to see if the recent tapering of failures holds or if a new surge in the market will drive another uptick in altcoin casualties.

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