About one in four crypto tokens launched since 2021 have failed in the first quarter of 2025, according to a recent report by CoinGecko. This alarming trend highlights the increasing volatility in the cryptocurrency market, exacerbated by the ease of token creation and broader market turbulence.
Key Takeaways
- High Failure Rate: 25% of tokens launched since 2021 have failed in Q1 2025.
- Total Tokens Launched: Nearly 7 million cryptocurrencies listed on CoinGecko since 2021.
- Market Downturn: The collapse of 1.8 million tokens in Q1 2025 marks the highest number of failures recorded in a single quarter.
- Impact of Token Creation Tools: The introduction of tools like Pump.fun has led to a surge in low-effort projects and memecoins.
The Surge in Token Failures
CoinGecko’s research analyst, Shaun Paul Lee, reported that over half of the nearly 7 million cryptocurrencies listed on their platform have ceased trading, with 3.7 million tokens now considered failed. The first quarter of 2025 alone saw the collapse of 1.8 million tokens, which is nearly half of all failures recorded since 2021.
This spike in failures is attributed to several factors:
- Market Volatility: Following Donald Trump’s inauguration in January 2025, Bitcoin reached a peak but was soon followed by a significant downturn in the crypto market.
- Ease of Token Creation: The launch of the token creation tool Pump.fun in January 2024 simplified the process, resulting in a flood of new tokens, many of which are low-effort projects.
Historical Context
In comparison to previous years, the number of token failures has dramatically increased. In 2024, there were 1.3 million failures, while the three years prior saw much lower attrition rates. Lee noted that prior to the introduction of Pump.fun, failure rates were in the low six digits, with only 12.6% of all cryptocurrency failures occurring between 2021 and 2023.
The Role of Pump.fun
Pump.fun has played a significant role in the current landscape of crypto tokens. Despite its popularity, the platform has a low graduation rate, with approximately 98% of tokens failing to transition to the open market. The best-performing week for Pump.fun was in November 2024, where only 1.67% of memecoins successfully moved off the platform.
Investor Sentiment
Investor interest in memecoins appears to be waning, particularly after a series of disappointing launches. CoinGecko’s founder, Bobby Ong, noted that the fallout from the Libra token launch has contributed to this cooling interest. The volatility in both crypto and stock markets, particularly following Trump’s threats of sweeping tariffs, has further impacted investor confidence.
Conclusion
The surge in crypto token failures serves as a stark reminder of the risks associated with the cryptocurrency market. As the landscape continues to evolve, investors must remain vigilant and informed about the potential pitfalls of new token launches. The ease of creating tokens may lead to a proliferation of projects, but as recent data shows, many of these tokens may not survive the test of time.
