Is Your Cryptocurrency Dead – or Has the Market Simply Moved On?

Written by Frode Skar, Finance Journalist.

Background

The cryptocurrency market has entered a phase of extreme attrition. Over the past few years, an unprecedented number of crypto projects have collapsed, many of them quietly disappearing from investor portfolios long before their losses were fully acknowledged.

Industry data shows that approximately 11.6 million crypto tokens went to zero last year alone, equivalent to more than 30,000 failed projects every single day. While many were short-lived memecoins, a significant number were held by retail investors who continued to wait for recoveries that never came.

What has happened in the crypto market

Since 2021, more than half of all crypto projects tracked by major market data platforms have failed. Statistically, picking a random altcoin has been riskier than a coin toss.

Last year marked a turning point. Roughly 86 percent of all crypto failures over the past five years occurred in a single year. A large share of these collapses followed a historic liquidation event in October, when around $19 billion in leveraged positions were wiped out within hours.

Tokens with shallow liquidity and thin order books were effectively erased, and the broader market has struggled to regain stable footing since.

Industrialised token creation and structural failure

Market volatility alone does not explain the scale of destruction. Between 2024 and 2025, the process of launching new tokens became fully automated. The barrier to entry collapsed, and the number of crypto projects surged from roughly 400,000 in 2021 to more than 20 million by the end of 2025.

Most of these projects lacked products, development teams, revenue models, or genuine use cases. Many relied on short-term influencer promotion and artificial trading volume before liquidity evaporated and prices collapsed.

The result has been a market where failure is no longer the exception, but the norm.

When is a cryptocurrency actually dead?

A crypto asset can technically exist forever on a blockchain. Smart contracts are immutable and persistent. But existence alone does not imply economic life.

In practice, liquidity and activity determine whether a crypto project is alive. There is no formal threshold for declaring a token dead, but several warning signs consistently appear.

No trading activity

Sustained lack of trading is often the first signal. A token with zero trades over multiple days, weeks, or months has effectively been abandoned.

Without volume, there is no price discovery and no realistic exit without destroying what little value remains.

Exchange delistings

When a crypto asset is removed from an exchange, remaining liquidity often disappears. Delistings typically occur due to low volume, stalled development, or regulatory concerns.

Projects that never reached major exchanges and are later removed from smaller platforms statistically have very little chance of recovery.

Rug pulls and outright fraud

Some crypto projects do not fade slowly but are deliberately destroyed. In these cases, developers drain the entire liquidity pool, often within minutes. The token remains visible in wallets, but its economic value is effectively zero.

Losses from such events have exceeded several billion dollars in recent years.

Zombie crypto: technically alive, economically irrelevant

Not all failed projects vanish entirely. Many become zombie assets: still listed, still tradable in theory, sometimes with large reported market capitalisations, but generating almost no real activity, fees, or adoption.

These projects are often sustained by brand recognition or the perpetual promise of future relevance that never quite arrives.

For investors, this represents a dangerous grey zone. A token may appear “alive” on price trackers while being functionally obsolete.

Liquidity matters more than market capitalisation

Market capitalisation alone is a misleading metric. A token can show a valuation of hundreds of millions of dollars while having only tens of thousands of dollars in liquidity.

In such cases, the valuation is largely fictional. If a modest sell order can crash the price, there is no meaningful exit.

Healthy projects typically maintain liquidity equivalent to 1–5 percent of market capitalisation. Anything materially below that threshold signals extreme risk.

Developer activity and false signals

For projects claiming to be technology platforms, developer activity is a key indicator. Extended periods without meaningful code updates often suggest abandonment.

However, this signal is increasingly manipulated. Some projects simulate activity through trivial code changes or copied repositories, creating the illusion of progress without substance.

As a result, volume, liquidity, and the substance of development must be assessed together.

Analysis: hope versus market reality

Crypto markets do not reward hope. History shows that most tokens that collapse toward zero never recover. Exceptions exist, but they are rare.

Market structure—higher lows, rising volume, and stable liquidity—matters far more than narratives constructed after the fact.

For investors, losses are often realised long before they are emotionally accepted.

What this means going forward

For most retail investors, the lesson is harsh but necessary:
Most crypto projects die. Many were already dead long before investors acknowledged it.

In a market defined by overproduction, low quality, and structural speculation, the ability to distinguish between genuine market life and illusion is critical. Liquidity, volume, and market structure determine survival—not promises, roadmaps, or hope.