Cryptocurrency is the Wild West of the financial world, teeming with opportunity and peril alike. While giants like #BTC and #Ethereum rule the land, the graveyards are full of 'dead' coins.
In this article, we delve deep into why cryptocurrencies fail and the lessons we can learn from them.
What Makes a Crypto Coin "Dead"? ☠️
A "dead" coin is usually one that's abandoned, failed in its Initial Coin Offering (ICO), turned out to be a scam, or was created as a joke and never intended for serious trading.
According to data, between 2013 and 2022, 2,383 crypto coins bit the dust.
2018 was the deadliest year for cryptocurrencies, with 751 coins meeting their end.
Why Do Crypto Fail? 📉
1. Abandoned/No Volume: These are coins that have seen less than $1,000 in trading volume over three months. They accounted for 66.5% of the failed coins.
2. Scams/Other Issues: Around 22% of coin failures were scams or had other controversies like Ponzi schemes.
3. ICO Failed/Short-Lived: These coins couldn't even get off the ground, making up 10% of the graveyard.
4. Joke/No Purpose: The remaining #crypto , accounting for a mere sliver of the pie, were created as jokes.
So, Why Was 2018 a Big Year for Failures? 🤔
Two words: Bubble Burst. #bitcoin price hit a historic high in late 2017, pulling the whole market into a speculative frenzy.
The bubble popped in 2018, leaving many new, speculative coins to die in its wake. Remember BitConnect? Yep, 2018 was its downfall too.
Despite past failures, don't let FOMO (Fear of Missing Out) keep you from this market. The crypto industry has shown remarkable resilience and maturation.
Only 27.62% of coins launched in 2018 have failed, a significant drop. Even better, only 4.74% and 1.03% of coins launched in 2019 and 2020 have failed.
Key Takeaways 🗝️
Research is King: Due diligence is more crucial than ever. #dyor
Don't Ignore Red Flags 🚩: If it's too good to be true, it probably is.
Industry Maturation: Newer coins seem less risky, but always proceed with caution.
Cryptocurrency is an exciting, if volatile, world. Like any investment, it carries risks—but with proper research and savvy, the potential rewards are limitless.
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