2022: a carnage for cryptocurrencies?

Undead – The crypto industry contains a large number of shitcoins, some of which met with lightning success, before seeing their value quickly collapse. This year’s bear markets got the better of many of these tokens, so they didn’t last long.

The year 2022, zombie cryptocurrencies are waking up

According to data of the site Statisticsthe number of cryptocurrencies would have quadrupled from 2019 to the beginning of 2022. In the month of February this year, it would have reached a peak at 10,397 unitsbefore dropping back to near the 1,000 mark, setting an all-time high in terms of declines.

Data from CoinGecko put forward different figures, but reveal the same trend. The platform welcomed more than 8,000 new cryptocurrencies last year, but 41% of the latter, i.e. approximately 3,300 coinswere eventually delisted from CoinGecko.

CoinGecko: the number of crypto zombies having been listed in 2021.
Number of cryptocurrencies listed in 2021 on CoinGecko and having failed – Source: CoinGecko

Faced with these significant fluctuations in the number of cryptocurrencies emerging and disappearing in the crypto industry, Riyad Careyanalyst at Kaiko, has paralleled two elements. The fact that on the one hand it is “relatively simple for a person to create a token”, and that on the other hand, “these tokens can obviously lose interest extremely quickly”.

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Price explosion before joining the rank of zombie tokens

A community’s growing disinterest in a cryptocurrency simply leads to its disappearance from major crypto platforms and investors’ radars, lack of sufficient adoption to sustain the project.

According to a ticket of November 19 from Julia Ng, head of marketing development at CoinGecko, the site withdraws many tokens which are unable to prove their solidityclosure of the project, lack of liquidity, etc. – or undergoing major changes – brand changes or inherent token mechanics, etc.. CoinGecko also delists a token considered a rug sweater.

These tokens which are on the downward slope then become zombie tokens, after some were wildly successful upon launch. This was particularly the case of the STO token that the decentralized marketplace Storeum launched on Ethereum (ETH)in the month of July 2019.

The price of the STO then had exploded, going from a few cents to go up to around $35, before returning to less than a dollar. Technically, the token still exists, but CoinGecko delisted it this year.

Seen from a certain angle, bear markets thus benefit the development of the crypto industry, as they constitute a stress testing which makes it possible to get rid of the less serious projects, while cryptocurrencies with solid fundamentals such as the Bitcoin (BTC), can come out even stronger.

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