Cryptocurrencies come and go. The reasons for the emergence of new coins is beyond obvious, but why do some projects disappear? We decided to find the answer to this question by collecting statistics on 700 dead crypto projects.
We discovered that the main reason for the death of cryptocurrency projects is a loss of interest on the part of traders. Investors stop buying and selling tokens, focusing on other assets instead. Trading volumes go down, and the number of traders in the market declines. As a result, liquidity drops to zero. This is the reason behind the death of 63.1% of all projects. The average lifespan of a cryptocurrency project is 1.7 years.
The second most popular reason is fraud committed by the companies themselves. The creation of scam projects peaked in 2017 when interest in cryptocurrencies was at an all-time high. On average, scam projects had a lifespan of 1 year, so many of them died in 2018. Scam projects make up 29.9% of all ‘dead’ cryptocurrencies.
Unsuccessful startups make up 3,6% of all dead cryptocurrencies. Another 3.2% account for joke cryptocurrencies. Projects in these two categories have an average lifespan of 1.6 and 1.4 years accordingly.