Introduction

Since the birth of Bitcoin (BTC), the cryptocurrency market has experienced explosive growth. As of March 2025, there are over 20,000 types of cryptocurrencies worldwide, most of which are 'altcoins' (cryptocurrencies other than Bitcoin). However, behind this prosperity lies high risk, as many altcoins quickly vanish after their birth, resulting in a market cap of zero and huge losses for investors. This article aims to explore the extinction rate of altcoins, analyze the reasons behind it, and assess the possibility of the cryptocurrencies held by investors going to zero. Through data analysis and trend speculation, this article attempts to provide a basis for rational judgment for investors.

1. The current situation and data on the extinction rate of altcoins

The extinction rate of altcoins refers to the proportion of altcoins that lose trading activity, market value, or are abandoned by the community within a specific timeframe. This phenomenon is particularly pronounced in the cryptocurrency market due to its low entry barriers and high speculation.

  1. Historical data

    • According to statistics from platforms like Coinopsy and Dead Coins, as of 2023, over 5,000 cryptocurrencies have been classified as 'dead' or 'abandoned'. These projects include failed ICOs (Initial Coin Offerings), development teams that ran away, or tokens with no maintenance.

    • CoinMarketCap data shows that during the ICO boom of 2017-2018, about 80% of projects disappeared within 18 months. For example, a 2018 study by Statis Group found that over 70% of ICO projects ultimately had a market cap of zero (Statis Group, 2018).

    • The DeFi and NFT boom in 2021 gave rise to a new wave of altcoins, but many projects (like meme coins) collapsed rapidly after the hype subsided. For example, the Squid Game token dropped 99.99% from its peak in 2021 due to a 'rug pull' scam.

  2. Quantifying the extinction rate

    • If the standard is 'completely no trading volume' or 'price drops to near zero (<$0.0001)', the historical extinction rate is about 40%-60%. An analysis in 2023 showed that among the 10,000 cryptocurrencies tracked by CoinGecko, about 50% had trading volumes close to zero over the past year (CoinGecko, 2023).

    • In 2025, as the market matures, the extinction rate may slightly decline but will still remain between 30% and 50%, as new projects continuously emerge while competition intensifies, eliminating the weaker ones.

  3. Characteristics of extinction

    • Low market cap projects: Altcoins with a market cap below $1 million have the highest extinction rate, accounting for about 80% of dead projects.

    • Lack of practicality: Projects with no real applications or ecosystem support (e.g., purely speculative tokens) are most likely to go to zero.

    • Short lifespan: Most extinct coins do not survive beyond 2 years.

Summary: The extinction rate of altcoins is high, with historical data indicating that 40%-60% of projects ultimately fail. The trend in 2025 may show slight improvement, but risks remain significant.

2. Reasons for the extinction of altcoins

The extinction of altcoins is not accidental but the result of multiple factors such as technology, market, and regulation working together. Understanding these reasons helps in assessing the zeroing out risk of the cryptocurrencies in hand.

  1. Technical defects

    • Many altcoins lack a reliable technical foundation. For example, code that copies Bitcoin or Ethereum without optimization results in poor security or scalability.

    • Solana (SOL) has faced trust crises due to network outages (multiple times in 2021-2022). If problems persist, it may threaten its long-term survival.

  2. Market competition

    • The crypto market is a 'winner-takes-all' ecosystem, with Bitcoin and Ethereum dominating (accounting for about 60% of market cap as of March 2025), leaving limited space for altcoins.

    • New projects need to compete with established public chains (e.g., Solana, Avalanche). If they can't build a user base, they are quickly eliminated. For example, EOS raised $4 billion in its 2018 ICO but saw its market cap drop out of the top ten by 2023 due to ecosystem shrinkage.

  3. Speculation and bubbles

    • Altcoins often rely on speculation-driven hype, such as Dogecoin (DOGE), which surged due to Elon Musk's tweets but lacks fundamental support, making it prone to crashing.

    • During the meme coin craze in 2021, 90% of projects went to zero within months, typical of imitators of SHIB.

  4. Regulatory and legal risks

    • Tightening regulations in various countries (e.g., China's 2021 ban, the US SEC's lawsuit against XRP) have prevented projects from operating. For instance, Ripple (XRP) saw its market cap halve due to a lawsuit.

    • Illegal ICOs or Ponzi schemes (e.g., PlusToken) being shut down leads to immediate zeroing out.

  5. Team and community incapacitation

    • It is common for development teams to run away or abandon maintenance. Data from Dead Coins shows that about 30% of dead projects perished due to 'lack of management'.

Summary: Technical defects, intense competition, speculative bubbles, regulatory pressure, and team incapacitation collectively drive up the extinction rate of altcoins, and investors need to be vigilant about these risk points.

3. Will the cryptocurrencies you hold go to zero?

Whether the cryptocurrencies in investors' hands go to zero depends on the specific coins held, market environment, and personal strategy. Here are the assessment methods and possibility analysis.

  1. Probability of mainstream coins going to zero

    • Bitcoin (BTC): As the cornerstone of the market, Bitcoin's probability of going to zero is extremely low (<1%), unless the global internet collapses or quantum computing breaks its encryption algorithms.

    • Ethereum (ETH): With a strong ecosystem, the probability of going to zero is also low (<5%), but if Layer 2 fails or a competitor (like Solana) completely replaces it, its value may significantly shrink.

    • Other blue-chip coins (e.g., BNB, SOL): The probability of going to zero is about 5%-15%, depending on platform stability and regulatory impact.

  2. The risk of zeroing out for small and medium market cap altcoins

    • Emerging public chains (e.g., Sei, Render): If the technology fails to land or the ecosystem is not formed, the probability of zeroing out could be as high as 50%-70%.

    • Meme coins (e.g., SHIB, FLOKI): Without fundamental support, the probability of going to zero exceeds 80%, especially in bear markets or when speculation wanes.

    • ICOs or niche projects: If there is no community support or the funding chain breaks, the probability of going to zero can reach 90%.

  3. Key factors affecting zeroing out

    • Market cycles: In bull markets, the risk of zeroing out decreases as capital inflows mask problems; in bear markets, weak projects are exposed, and the extinction rate surges.

    • Holding time: Short-term speculators are more susceptible to zeroing out, while long-term holders (e.g., BTC, ETH) face lower risks.

    • Project fundamentals: Coins with active development, real use cases, and community support (e.g., Chainlink LINK) are more resilient.

  4. The impact of personal strategy

    • Diversified investment: Holding multiple cryptocurrencies can reduce overall zeroing out risk.

    • Research and monitoring: Regularly assessing project progress (e.g., GitHub activity, white paper feasibility) can help avoid pitfalls.

    • Stop-loss mechanism: Setting exit strategies can reduce losses.

Case analysis:

  • If you hold BTC and ETH, the probability of going to zero is negligible, but short-term fluctuations are inevitable.

  • If you hold meme coins (e.g., the emerging 'CyberDog' in 2025), the risk of going to zero is extremely high, potentially collapsing within months due to fading speculation.

Summary: The probability of mainstream coins going to zero is low (<15%), while the risks for small and medium market cap altcoins are high (50%-90%). The fate of the cryptocurrencies you hold depends on their fundamentals and market environment.

Conclusion

The extinction rate of altcoins historically ranges from 40% to 60%, which may slightly decrease to 30% to 50% in 2025, but it remains a high-risk area. Reasons for extinction include technical defects, market competition, speculative bubbles, regulatory pressure, and team incapacitation. Whether the cryptocurrencies in investors' hands go to zero depends on the type of coins and personal strategies: mainstream coins like Bitcoin and Ethereum have strong survival rates, while small and medium market cap projects, especially meme coins, face extremely high risks of zeroing out.

Advice: Investors should prioritize cryptocurrencies with fundamental support, diversify investments, and avoid blindly chasing trends. At the same time, closely monitor market cycles and regulatory dynamics to reduce zeroing out risk. In the future, as the crypto market matures, the extinction rate of altcoins may further decline, but speculative risks will persist in the long term.

References

  1. Statis Group. (2018). ICO Market Research Report.

  2. CoinGecko. (2023). Annual Crypto Report.

  3. Coinopsy. (2023). Dead Coins Database.

  4. Investopedia. (2025). The Rise and Fall of Altcoins.

  5. Crypto.news. (2025). Altcoin Survival Rates in 2025.

Disclaimer: This article is an analytical discussion and does not constitute investment advice. The risks of cryptocurrency investment are extremely high; please consult a professional financial advisor.