Most Crypto Has Died Since 2020, but Bitcoin Could Spark a Revival
Bitcoin’s rebound might signal good times ahead for more than just the apex token, possibly overturning a free fall in the broader crypto community.
Since 2020, 72% of crypto projects have died, according to a report published by Alphaquest and Storible. Of over 12,000 investigated projects, 8,854 were found to be defunct.
2023 was the toughest stretch in the four-year timeframe, accounting for 59.35% of dead coins. Immediately preceding the year was the demise of FTX, a crypto exchange whose sudden collapse sparked serious regulatory scrutiny. In fact, 32% of projects have died after FTX’s went down, Alphaquest found.
But this year could finally turn the page.
Spot bitcoin ETFs, the first of their kind in the US, has reignited enthusiasm for the cryptosphere. Since their January launch, bitcoin has surged over 47%, rallying to its all-time high on Wednesday.
Bullish expectations hold that it could rise to $100,000 by year end. Cited tailwinds include more ETF inflows, the token’s upcoming halving, and looser interest rates. According to Standard Chartered analyst Geoff Kendrick, that means more attention for the industry as a whole:
“BTC increasing lifts all boats in a way,” he told Business Insider over email. “In other words, it brings new cash and new eyeballs to the industry which is super helpful for everything crypto-related.”
What’s more, the token’s rise offers more buying power for crypto investors. That’s as bitcoin is often used as collateral for margin positions on exchanges, according to Alexander Kuptsikevich, senior market analyst at FxPro.
“Interest in altcoins is intensifying as bitcoin and the largest cryptocurrencies increasingly retreat to all-time highs. Psychology is at work here, as a long period of all-time highs and a rather heavy asset makes you look for new ideas and increases your appetite for risk,” he told BI.
CoinFund Head of Liquid Investments Seth Ginns shared a similar take, noting that investors will likely focus on projects in the early phase of development:
“We are excited about key infrastructure investments from layer-1s to scaling solutions, the intersection of AI and crypto, gaming applications, and decentralized physical infrastructure, to name a few areas,” he said over email.
On Friday, the crypto market hit a new record, with capitalization reaching $2.58 trillion, Kuptsikevich wrote in a market update. Notably, gains were concentrated in altcoins: ethereum rose 2.9%, while BNB and dogecoin peaked as high as 7%.
Still, bitcoin will likely remain the leading market driver through 2024. In fact, Kendrick suggested that the token’s share of the market could push higher, rising from around 50% to the 55%-60% range this year.
