Are Cryptocurrencies Dead or Just in a State of Flux?

Cryptocurrencies have been in the news a lot lately, with some people saying they're dead and others saying they're just in a state of flux. The truth is, cryptocurrencies are still evolving, but they're not the same as they were a few years ago.

In the past, cryptocurrencies like Bitcoin and Ethereum were the only ones that mattered, but now there are thousands of different cryptocurrencies out there. According to our research, in 2020, there were over 5,000 different cryptocurrencies in existence, with more being created all the time.

The rise of decentralized finance (DeFi) has also brought new life to the cryptocurrency space. DeFi platforms allow users to lend, borrow, and trade cryptocurrencies in a decentralized way, without the need for intermediaries like banks.

Many cryptocurrencies fail, it's just a matter of when. Much like the dotcom era of the Internet, only a few projects will rise from the thousands that exist to take market share.

Some of the most famous dead coins include BitConnect, which was a Ponzi scheme, FTX Token, which lost its value after the company filed for bankruptcy, and Alubala, which had its team dismantled.

A cryptocurrency can be classified as dead for a number of reasons, including not being traded for over 30 days or being exposed as a scam. However, as long as someone is willing to run the blockchain network, it can technically stay alive forever.

Here are some examples of famous dead cryptocurrencies:

If a cryptocurrency fails, the price will start to spiral.

The cryptocurrency may get delisted, making it harder to buy or sell.

A coin can be classified as dead for reasons such as not being traded for over 30 days.

If there's little to no financial incentive to run the network, no one will, effectively killing the coin.

However, if motivated people within the community are willing to run the blockchain network, the coin can technically stay alive forever.

But, if the project was a scam or irreparably damaged, it will die and become a dead coin.

Most cryptocurrencies will indeed fail, and it's simply a matter of when. This is because the market can only support a limited number of successful projects.

The dotcom era of the Internet saw thousands of projects rise, but only a few managed to take market share. A similar scenario is playing out in the cryptocurrency space.

Bitcoin and Ethereum are likely to be the Microsoft, Apple, or Google of the crypto world, but there are other digital assets that could rise to prominence.

It's worth noting that even successful projects like NVIDIA took time to grow.

OneCoin was a notorious Ponzi and pyramid scheme in crypto history, launched in 2014.

The company secretly conducted database entry scams by simulating transactions not registered by an actual blockchain, with no actual mining behind the apparent cryptocurrency emissions.

It's estimated that OneCoin brought in nearly $4 billion, with no actual coins or blockchain network.

Users simply "exchanged" coins for euros and vice-versa on an exchange controlled by the creators.

OneCoin was never delisted on major exchanges because it was never even listed on any of them.

BitConnect (BCC) was a cryptocurrency that amassed $2.5 Billion in Market Cap during its lifetime.

FTX Token (FTT) was the native token of FTX Crypto Exchange, which entered circulation in 2019 and had huge popularity among traders.

Alubala (AAA) was originally created on Ethereum Blockchain and had a circulation of 400 000 000 coins, but today it has 0 circulation supply due to its team being dismantled.

These three cryptocurrencies are examples of how even the most popular and promising projects can fail.

Here are some key facts about each of these defunct currencies:

Note that while BitConnect was a Ponzi Scheme, FTX Token's failure was due to the company's bankruptcy, and Alubala's failure was due to its team being dismantled.

The BitConnect (BCC) cryptocurrency is a notable example of a defunct cryptocurrency, having amassed $2.5 Billion in Market Cap during its lifetime.

It was launched in 2016 and reached its all-time high (ATH) of $471 in December 2017, but was later revealed to be a Ponzi Scheme.

The FTX Token (FTT) is another example, which entered circulation in 2019 and had huge popularity among traders before the company filed for bankruptcy on November 11, 2022.

The Alubala (AAA) cryptocurrency, originally created on the Ethereum Blockchain, has a circulation of 400,000,000 coins, but due to its team being dismantled, it now has 0 circulation supply.

Here are some notable dead coin examples:

Some of the most notable examples of failed cryptocurrency projects are actually scams, rug pulls, or overhyped projects.

The biggest crypto failures in history tend to be scams, rug pulls, or overhyped projects.

One of the most famous dead coins is BitConnect, a project that promised unusually high returns but turned out to be a Ponzi scheme.

Famous Dead Coins

The biggest crypto failures in history tend to be scams, rug pulls, or overhyped projects.

Another example is OneCoin, a cryptocurrency that was marketed as a legitimate investment opportunity but was actually a pyramid scheme.

Famous Dead Coins

The biggest crypto failures in history tend to be scams, rug pulls, or overhyped projects.

BitConnect Coin (BCC) was a cryptocurrency that reached an all-time high of $463 in December 2017. It was based on high yields, which were later revealed to be due to it being a Ponzi scheme.

The UK government gave the company two months to prove legitimacy, but it failed to do so. The Texas State Securities Board issued a cease and desist order on January 3, 2018, calling it a Ponzi scheme and citing a lack of transparency.

BitConnect Coin's price plummeted to zero shortly after it shut down two weeks later. This is a stark reminder of the risks involved in investing in unproven or suspicious projects.

Here are some key statistics about BitConnect Coin:

Crypto markets are up 24/7, globally, which means prices can fluctuate wildly at any time.

Volatility is substantially higher on crypto than on traditional markets like NASDAQ, making it difficult for everyday users to navigate.

Any fluctuation in crypto markets can lead to substantial price swings due to the low volumes, which are a fraction of established asset markets.

Low trading volumes imply that a crypto asset lacks either utility or trader interest, and this often leads to abandonment.

Up to 60% of all projects have inferior liquidity, and six in ten coins with negligible volumes are no longer supported by their developers.

More than half of all cryptocurrencies have ceased to exist, with 14,039 out of 24,000 cataloged on CoinGecko since 2014 meeting their demise.

The majority of these defunct cryptocurrencies emerged from projects initiated during the bullish period of 2020 to 2021, with 7,530 failing to make it.

During the preceding bull market, over 11,000 cryptocurrencies were introduced, with approximately 70% of them folding since.

In the 2017 to 2018 bull run, 1,450 projects have shuttered out of the 3,000 cryptocurrencies listed, resulting in a comparable failure rate of around 70%.

The notable surge in failed coins during the 2020 to 2021 period can be attributed to the accessibility of token deployment and the popularity surge of meme coins.

Market volatility is a harsh reality in the cryptocurrency space. Prices can fluctuate wildly, making it a challenging landscape for investors.

Crypto markets are open 24/7, globally, which means that prices are constantly changing. This lack of downtime or borders contributes to higher volatility.

Volatility is substantially higher on crypto markets compared to established asset markets like NASDAQ. This can be a significant barrier to adoption for everyday users.

Low trading volumes can also exacerbate market volatility. In the cryptocurrency space, up to 60% of projects have inferior liquidity, making it difficult for assets to gain traction.

Negligible trading volumes can be a death knell for cryptocurrency projects. If a project doesn't see significant trading activity, it's often abandoned by its developers.