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Analysis of Crypto Project Demise
Nearly two-thirds of crypto projects launched in recent years have met their demise, according to a recent analysis of over 12,000 cryptocurrency projects. The study revealed insightful data about the challenges and characteristics of failed crypto projects.
Key Findings
- 72% of projects born during the 2020-2021 bull run have failed.
- Over 8,850 out of 12,343 crypto projects investigated have become defunct in the past year.
- 65% of crypto projects had met their demise by 2023.
- The Terra and Cardano ecosystems have the highest number of defunct coins.
Characteristics of Failed Projects
The report identified specific common characteristics among failed projects:
- 93% suffered from low liquidity or trading volume, indicating declining investor interest.
- 58% had inactive or deleted Twitter accounts or websites, showing a lack of continuous social engagement or operational presence.
- 48% were delisted from major tracking platforms such as CoinMarketCap.
Impact of Market Fluctuations
The research findings also highlighted the susceptibility of crypto projects to market fluctuations and bankruptcies:
Following the collapse of major platforms like Terra and FTX, a high percentage of projects failed. After the Terra crash, 35% of crypto projects were deemed defunct, while the downfall of FTX led to the closure of 32% of projects.
Backers and Lifespan
The study emphasized the impact of high-profile backers on project success and revealed that the average lifespan of crypto projects was three years, with dead projects having an even shorter lifespan of just 2.21 years.
Future Outlook
Despite the high rate of failure, the cryptocurrency industry still holds promise for the future. The continuous emergence of new projects and narratives demonstrates the market’s adaptability and resilience. The report also stresses the importance of making wise investments, learning from past experiences, and embracing technological advancements in navigating industry challenges.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
