The number of dead coins in crypto markets is rising.
At the beginning of 2014, when the price of a single bitcoin was in decline, there were 67 coins listed on coinmarketcap.com, a website that aggregates coin prices from multiple exchanges. As of this writing, there are 1607 coins listed on the same site. As media spotlight brought mainstream traction to crypto markets, the number of cryptocurrencies being traded at exchanges multiplied. Tacking a coin onto your product almost became de rigueur for companies and startups.
Not all of them have outlasted the recent bloodbath in crypto markets, however. According to latest estimates, between 600 to 800 cryptocurrencies have “died”. A dead coin is a coin which has been abandoned without further updates or its valuations has crashed to less than 1 cent.
A CNBC report pegs the number of such cryptocurrencies at 800 while another report at Cryptoslate estimates a figure of more than 600 for the same statistic. A website Deadcoins.com maintains a list of the 843 so-called dead coins. Coinopsy estimates that figure to be more than a thousand. A glance through coinmarketcap.com listings reveals 249 coins whose valuations are undetermined. These include the likes of Sakuracoin, a cryptocurrency with Proof of Work algorithm that was launched back in 2014, and PWR Coin, which has been launched recently.
The death of coins provides interesting pointers to issues and occurrences within the cryptocurrency space. For example, a coin’s death is directly correlated to the number of failures for initial coin offerings (ICOs). As the ICO market exploded, so did the number of firms cashing in on the craze for coins related to their product.
But SEC crackdowns coupled with regulatory restrictions have worked to increase the failure rate for such offerings. An ICO failure translates to the death of a coin. In an interview with Bloomberg, investor Aaron Brown pointed to research released earlier this year which stated that more than 80% of ICOs were frauds and 10 percent lacked substance. “Most of the remaining 10 percent will probably fail as well,” he said.
The deadcoin.com website also lists other reasons for coin failures. They are hacks, scams, parody, and deceased. With 637 deceased coins, this category encompasses the others and is also the main reason for a coin’s death. Hacks accounted for just 12 dead coins proving that cryptocurrency blockchains are, by and large, safer than exchanges which have been frequently hacked.