Visual Analysis: The Death Trend of Cryptocurrency Projects in the Past Decade

Original Title: 《A Visual Analysis Of 10 Years Of Dead Crypto Coins》

Author: Ian Wright, CoinKickoff

Compiled by: Qianwen, ChainCatcher

*The history of cryptocurrency can be traced back to the boom of the 1980s, when films like *Trading Places* and Wall Street glamorized financial culture. In 1983, pioneering cryptographer David Chaum published research, laying the groundwork for electronic payments, blockchain, and virtual currencies.*

These ideas were ahead of their time, and for many years, decentralized virtual currencies were rarely discussed outside the circles of free-market liberalism. In 2009, the emergence of Satoshi Nakamoto, Bitcoin software, and currency changed everything—using a source code that later allowed cryptocurrencies to explode in growth throughout the 2010s and enter the market.

Currently, there are tens of thousands of currencies in the market, posing challenges for investors and regulators. As a result, many liken it to the "internet bubble" of about 25 years ago.

To analyze the cryptocurrency market, CoinKickoff conducted a visual analysis of failed cryptocurrency cases over the past decade, covering the initial stages of ICO failures to the later stages of losing market favor.

What We Did

We studied data from over 2,400 failed cryptocurrencies (Coins) sourced from Coinopsy, compiling the current status data for each cryptocurrency. We then analyzed the performance of each cryptocurrency over the past decade to understand when and why cryptocurrencies were eliminated.

After compiling this data, we compared it with CoinMarketCap's historical snapshots for each year, allowing us to accurately understand all cryptocurrencies that have appeared in the market.

Key Findings

• 704 failed cryptocurrencies started circulating during the 2017 cryptocurrency boom; only 204 failed cryptocurrencies began circulating from 2016.
• 2018 was the worst year for cryptocurrency performance, with 751 cryptocurrencies now deactivated.
• The failure rate of cryptocurrencies in 2014 was the highest, with 5% of the 793 cryptocurrencies no longer in circulation.
• Of the 793 cryptocurrencies established in 2014, 551 have been abandoned. This was the year with the most significant losses in cryptocurrencies.

91% of cryptocurrencies from the 2014 crash are no longer in use

Looking back at the history of cryptocurrency, 2013 is seen as the first wave of cryptocurrency development. In that year, emerging technologies were rapidly advancing, from drones to smartwatches, and the price of Bitcoin soared from $150 to $1,000, peaking at $1,127 in January 2013. Before this, there were only 14 cryptocurrencies on the market—by 2022, only Bitcoin and Litecoin remained in the top ten.

The surge in Bitcoin's price led to the rise of its competitor currencies. Our data shows that 84 cryptocurrencies entered the market in 2013, and 607 in 2014—all aiming to cash in during the early 2014 Bitcoin crash, when Bitcoin was embroiled in scandals related to the online drug market "Silk Road."

However, the surge of emerging cryptocurrencies in 2014 did not last. According to our data, 91% of the cryptocurrencies established in 2014 ultimately failed due to low trading volumes or abandonment. Notably, aside from the meme coin "Dogecoin," many opportunists attempted to capture the early cryptocurrency market but ended up failing.

The second rise of cryptocurrency led to the failure of 750 cryptocurrencies

2017 was marked as the "Summer of Love" in cryptocurrency history. The emerging blockchain technology first attracted the attention of global business leaders, leading to a surge in investment. In July 2017, Goldman Sachs' chief technician Sheba Jafari predicted that by the end of the year, cryptocurrency prices would reach $3,600.

That year saw many speculative ICOs—most notably Filecoin, which raised $257 million. However, beneath the surface, there were undercurrents. A total of 704 now-failed cryptocurrencies entered the market that year, the highest in the past decade. A report from ICO consulting firm Stasis Group in 2018 found that 80% of the projects launched in 2017 were scams, raising a total of $11.9 billion.

Our research indicates that among the 751 cryptocurrencies that failed in 2018, 30% were scams, the highest in the past decade. The most notable ICO scam was the Vietnamese cryptocurrency PinCoin and iFan. Local journalists revealed that these companies defrauded up to 32,000 investors, amounting to $600 million, leading to an investigation by the Ho Chi Minh City police.

Three-quarters of cryptocurrencies from 2014 are no longer in existence

One point we often overlook is that cryptocurrency is still in its infancy. While investors have been trading stocks for centuries, the first Bitcoin transaction occurred recently in 2010 at a pizza restaurant in Florida. The crypto market has yet to find its footing, and economists have differing opinions on its future development.

Despite evidence that cryptocurrency trading and investment can indeed disrupt traditional finance, the industry has seen numerous high-profile failures. A report from the China Academy of Information and Communications Technology (CAICT) shows that of the blockchain projects released so far, 92% are still active, with an average lifespan of only 1.22 years.

It turns out that many early cryptocurrencies faced significant challenges. According to our research, more than half of all cryptocurrencies launched between 2013 and 2018 no longer exist. Over three-quarters (76.5%) of the currencies were launched against the backdrop of the first cryptocurrency boom in 2014 and have since failed.

Only 16 cryptocurrencies have been abandoned since 2020

According to blockchain research platform LongHash, 63.1% of cryptocurrency projects have been abandoned by investors, causing their prices to plummet. The market is saturated, with over 12,000 currencies currently existing, making it difficult for well-developed projects to gain attention. Coinopsy lists some reasons why cryptocurrencies may be abandoned, including outdated blockchain technology and personal circumstances of developers.

Data shows that the first price surge of cryptocurrencies in 2013 led to the highest number of abandoned currencies. In mid-2013, 61.1% and in mid-2014, 69.5% of cryptocurrencies were abandoned. However, recent trends indicate that the frequency of cryptocurrencies losing market appeal is declining; since 2020, only 16 cryptocurrencies have been eliminated from the market due to lack of investment. Nonetheless, there are concerns that the significant drop in cryptocurrency prices in 2022 may lead to more cryptocurrencies being abandoned in the future.

2017 was the peak year for cryptocurrency scams

Due to a lack of regulation, cryptocurrencies became prime targets for scams and speculators. Not only can cryptocurrencies themselves be used for scams, but criminals also exploit existing currencies like Bitcoin and Ethereum to deceive investors.

The Federal Trade Commission reported that since 2021, over 46,000 people have fallen victim to cryptocurrency scams, with total losses exceeding $1 billion. Following the latest price surge in 2021, renewed interest in the market led to a new wave of cryptocurrency crimes—Chainanalysis data indicates that the related amount reached $1.4 billion.

Of the cryptocurrencies established since 2019, fewer than 2% are scam cryptocurrencies. The crypto market peaked in 2017, when 17% of currencies were scam currencies. Fraudsters profited $490 million from the ICO bubble that year, and the Securities and Exchange Commission is continuing to investigate crimes from that period.

The 2017 ICO boom led to the most failures of cryptocurrencies

When companies grow large enough to trade on the stock market, they launch an IPO (Initial Public Offering) to raise equity capital from public investors. In contrast, Initial Coin Offerings (ICOs) are designed to attract interest in new cryptocurrencies, primarily to encourage investors to buy into the cryptocurrency. ICOs can also offer additional benefits related to the company's products—including shares of the company itself.

Mastercoin was the first project to conduct an ICO in 2013. Public interest in cryptocurrencies grew alongside rising prices, leading to explosive growth in this practice in 2017. Nevertheless, our research indicates that 12.6% of all cryptocurrencies launched that year failed due to ICO failures, more than in any other year in the past decade.

Research from consulting firm GreySpark Partners found that nearly half of all ICOs launched in 2017 and 2018 failed to raise any funds, and this practice is prone to fraud, ultimately leading federal authorities to strengthen regulations and impose strict penalties for misconduct in the industry. Our data shows that only five cryptocurrencies' ICOs ended in failure.

The tumultuous first decade of cryptocurrency—what happens next?

The cryptocurrency market is growing at an unprecedented pace, with rapidly advancing technology bringing new investment opportunities—the most obvious being the NFT boom of 2021. Bitcoin continues to dominate the market, and some investors predict that by 2023, its price could reach $100,000. However, in 2021, the value of Ethereum grew by 409%. Despite the global instability caused by Russia's invasion of Ukraine, analysts predict that by 2030, cryptocurrencies will contribute $4.9 billion in industry value.

How did we get to today? Many experts compare the growth of cryptocurrency to the "internet bubble" of the early 21st century—innovation led to an explosion of internet companies and investors searching for the next Amazon or eBay. In contrast, cryptocurrency saw a surge in investment in 2013 and 2017, flooding the market with new cryptocurrencies as investors rushed to profit from the "next big event."

While many of these cryptocurrencies failed due to lack of investment, ICO failures, or scams, they have sounded the alarm for the investment community. The U.S. government and global markets face numerous challenges in regulating cryptocurrencies to better protect investors. Nevertheless, over the past decade, cryptocurrencies have demonstrated their potential to disrupt traditional financial markets.

Methodology

To conduct a visual analysis of the failed cryptocurrencies over the past decade, CoinKickoff studied the status data of over 2,400 failed cryptocurrencies provided by Coinopsy. We compiled data on each cryptocurrency's current life status, reasons for failure, and the year.

Reasons for failure include ICO failures, abandonment due to trading volumes below $1,000 within three months, scams, or the cryptocurrencies being casually issued by the project parties.

We then cross-referenced this dataset with CoinMarketCap's historical snapshots for each year—containing all cryptocurrencies that have appeared in the market. The total number of cryptocurrencies released in specific years was used to calculate the percentage of failed cryptocurrencies among all cryptocurrencies.

Data collection was conducted in August 2022.