The Token that Disappeared from Data Analysis in the Last Decade: From Failed ICOs to Decreased Market Interest

Author: CoinKickoff

Translation: Leo, BlockBeats

The history of cryptocurrency can be traced back to the financial boom in the 1980s, when financial culture was sublimated under the influence of films such as “Trading Places” and “Wall Street”. In 1983, a pioneering cryptographer, David Chaum, published research findings that laid the foundation for electronic payments, blockchain, and cryptocurrency.

At that time, these were all futuristic ideas, and for many years, cryptocurrency was rarely discussed outside the circle of “liberal policy” in the free market. However, there was a turning point in 2009 – Satoshi Nakamoto developed Bitcoin in 2009, and the cryptocurrency market exploded in growth around 2010.

Today, there are thousands of cryptocurrencies on the market, making it a challenging market for investors and regulators alike. Many people believe that there are too many circulating tokens on the market and compare it to the “dot-com bubble” of about 25 years ago.

In order to analyze the cryptocurrency market, we have conducted a visual analysis of tokens that have collapsed and disappeared over the past decade, from failed ICOs to the waning interest in the market.

We referenced data on more than 2,400 disappeared tokens from Coinopsy, compiled data on the current status of each token, analyzed their performance over the past 10 years, and recorded the time and reason for each token’s elimination.

After compiling this data, we compared it with CoinMarketCap’s historical snapshots from each year, providing us with accurate data on all tokens that have ever circulated in the market.

Data Overview

In 2017, 704 tokens that have since disappeared began to be issued, more than 224 in 2016.

2018 was the most dangerous year for the cryptocurrency industry, with 751 tokens disappearing.

2014 was the year with the highest token mortality rate, with 76.5% of the 793 tokens no longer in circulation, and 551 tokens disappeared.

The Cryptocurrency Crash of 2014

When reviewing the price history of cryptocurrency tokens, 2013 can be considered the first boom era of cryptocurrency. Against the backdrop of emerging technologies dominated by drones and smart watches, the price of Bitcoin soared from $150 to $1,000, reaching a high of $1,127 in November 2013. Before the Bitcoin surge, there were only 14 tokens in the cryptocurrency market, and as of 2022, only Bitcoin and Litecoin remain in the top 10.

The surge in Bitcoin prices led to a wave of competition for market interests in tokens. Data shows that in 2013, 84 tokens entered the market, and in 2014, 607 tokens did so, all to profit from Bitcoin’s crash in early 2014, when most Bitcoin trades were related to the dark web black market Silk Road.

However, the squeeze on emerging cryptocurrencies in 2014 did not last. Data shows that 91% of the tokens established in 2014 ultimately disappeared due to low trading volume or abandonment (although there were exceptions, such as Dogecoin), and many opportunists who tried to monopolize early cryptocurrency markets failed.

Second surge in cryptocurrency prices

2017 became the “summer of love” in cryptocurrency history, with everyone loving cryptocurrencies, and emerging blockchain technology first attracting the attention of global business leaders, leading to a surge in investment. In July 2017, Sheba Jafari, a technology analyst at Goldman Sachs, predicted that Bitcoin would reach $3,600 by the end of the year.

Many profitable ICOs appeared that year, with the most famous being Filecoin, which raised $257 million. However, everything was not as it seemed, with 704 tokens that have since disappeared entering circulation in the cryptocurrency market that year, the most in the past decade. A report by ICO consulting firm Stasis Group in 2018 stated that 80% of ICOs in 2017 were classified as frauds, accumulating $1.19 billion in assets.

Our research shows that of the 751 coins that died in 2018, 30% were fraudulent, the highest in the past decade. The most famous ICO frauds were PinCoin and iFan from Vietnam. Local journalists exposed companies of this kind for defrauding up to 32,000 investors for a total of $660 million, and the Ho Chi Minh City police investigated the matter at the time.

2014 token data

2017 was the peak of cryptocurrency scams

Due to the lack of regulation in the cryptocurrency market, fraudulent schemes and opportunistic scams have been rampant and make up a significant portion of the cryptocurrency market. In addition to tokens created specifically for scams, criminals can also use mainstream currencies like Bitcoin and Ethereum to defraud investors.

The Federal Trade Commission reports that since the beginning of 2021, over 46,000 people have fallen victim to cryptocurrency scams, resulting in losses totaling more than $1 billion. Chainanalysis data shows that after the latest price surge in 2021, interest in the market surged again, leading to a wave of cryptocurrency crime involving up to $14 billion.

Despite this, less than 2% of tokens issued since 2019 have been exposed as fraudulent tokens. 2017 was the peak of cryptocurrency fraud, with 17% of tokens being fraudulent (210 out of 1232 tokens are now considered fraudulent and have disappeared), with fraudsters earning $490 million during the 2017 ICO boom.

When a company becomes large enough to trade on the stock market, it launches an IPO to raise money from public investors. In contrast, ICOs are the main channel for attracting people to buy newly launched cryptocurrencies. Investors buy tokens, but they can also offer broader relationships with the company’s products, including shares in the company itself.

Mastercoin was the first project to launch an ICO in 2013, and this practice reached its peak in 2017 as mainstream interest in cryptocurrencies grew with their rising prices. Nonetheless, our research shows that 12.6% of all tokens launched that year failed due to unsuccessful ICOs, which is more than any other year in the past decade.

Research by consulting firm GreySpark Partners found that nearly half of all ICOs launched in 2017 and 2018 failed to raise any funds, and this practice is susceptible to fraud, ultimately leading to increased regulation and harsh penalties for misconduct in the industry. As a result, our data shows that only five token ICOs failed.

After a tumultuous first decade, what’s next for cryptocurrency?

The cryptocurrency market is growing at an unprecedented pace, with rapidly advancing technology bringing new investment opportunities – most notably the NFT craze of 2021. Bitcoin still dominates the market, with some investors predicting its price could reach $100,000 by 2023. However, in 2021, Ethereum grew in value by 409%. Despite global instability caused by the Russian invasion of Ukraine and resulting economic slump, analysts predict Ethereum will bring $4.9 billion in value to the crypto industry by 2030.

Many experts have drawn comparisons between cryptocurrency growth and the “dot-com bubble” of the early 2000s, when innovation led to a surge in internet companies and investors looking for the next Amazon or eBay. In contrast, cryptocurrency investment surged in 2013 and 2017, with new currencies flooding the market and investors racing to profit from the “next big thing.”

While many of these tokens have disappeared due to lack of investment, failed ICOs, or scams, the market also faces numerous challenges in regulating cryptocurrency to protect investors. But the investment world has taken notice of the crypto industry, and cryptocurrency has proven its ability to disrupt traditional financial markets over the past decade.

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