Are All Cryptocurrencies Dead? Debunking the Myth

The cryptocurrency landscape is vast and dynamic, with over 9,000 unique digital assets in circulation as of March 3, 2021. However, amidst this ecosystem, some coins have seemingly withered and disappeared, leading many to ask: Are all cryptocurrencies dead?

Understanding Dead Cryptocurrencies

The term 'dead cryptocurrency' is often used to describe coins that have ceased to have any significant utility or trading activity. According to data from Coinopsy, a tracker for dead cryptos, the number of 'dead coins' has grown by 35% over the last year to 1,949 as of the time of writing. These are coins that have lost their functionality due to various reasons such as:

Scam websites and nodes Website downtime Wallet issues Zero or negligible liquidity Abandonment by developers Inactivity and halted development

For instance, around February last year, the number of total dead coins stood at over 1,440. It is important to note that when information on the reasons for a coin’s disappearance is unavailable, it falls into the 'default abandoned' category.

What Triggers the Rise in Dead Coins?

The surge in dead coins, particularly in 2017, can be attributed to the wave of Initial Coin Offerings (ICOs), which gained immense popularity. ICOs aimed to create new blockchain-based cryptocurrencies or related apps/services. According to Crunchbase, ICOs raised a staggering 4.9 billion in 2017. CoinMarketCap reports that they increased the count of existing coins from 29 to over 850 in that year. By December of the previous year, the total number of cryptos had reached close to 8,000. As of March 3, 2021, there were 9,108 cryptos in circulation, led by Bitcoin and Ethereum.

Is the Cryptocurrency Market Really Dying?

Despite the growing number of 'dead' cryptocurrencies, the overall market continues to show resilience. The misconception that the entire industry is in decline is far from the truth. The evidence suggests that while some coins have failed, many others are thriving and even gaining more value.

Cryptocurrency Price Trends

When the cryptocurrency market experiences a bull run, people tend to focus on high volume and frequent price movement. Yet, during a bear market, some coins maintain their value, including Bitcoin, which typically sees a spike in searches and higher prices when interest peaks, as shown by Google trends. Over the past five years, there have been two notable peaks: one in 2018 and another in 2021. Each of these periods saw Bitcoin hitting an all-time high, indicating robust demand and value.

In the broader landscape, there are numerous cryptocurrencies that are not dead. They are actively trading and contributing to the ecosystem. For instance, Ethereum, Polkadot, Solana, Binance, and FTX are all thriving cryptocurrencies that are working on projects poised to transform the blockchain industry.

Conclusion

While it is true that many startups and projects involving cryptocurrencies have failed, the market is far from dead. The majority of existing and new coins continue to serve a valuable purpose in the digital economy, with some even gaining significant value. The rise in dead cryptocurrencies is a natural part of the industry's rapid growth and evolution. To navigate this landscape successfully, it is crucial to invest wisely and seek out those coins with strong development and a promising future.