According to CoinMarketCap, there's been over 23,000 cryptocurrencies created to date. But in reality, only around 9,000 are actively traded. So, what happened to the rest? In this journey, we cover the long lost dead crypto coins and tokens and the red flags to look out for. We'll arm you with the skills to identify patterns and tactics to dodge these bullets.
Dead Coins Explained
Dead coins in cryptocurrency represent vanished digital money. They most often succumb to pitfalls like fraud, dwindling enthusiasm, or an inability to vie effectively within the marketplace. They often leave a trail of high expectations turned into disappointment.
Projects with low trading volumes indicate little to no user engagement or developer support. Interestingly, it’s estimated that six out of ten of these coins are abandoned by their creators. This highlights how certain endeavors plummet into obscurity once they begin trading, failing to reach the lofty aspirations set for them.
The Evolution of Dead Coins and Tokens
Leading up to 2023, there has been a notable decrease in the cryptocurrency market, which has led to the death of a total of 65% of projects
The reasons are as varied as they come—ranging from insufficient funding, limited listings on reputable exchanges with high liquidity, to outright scams or projects that simply lost their community support. For anyone looking into the historical trends, it becomes evident how vital understanding this evolution is.
Amidst all the challenges, digital currencies forges ahead with resilience - reshaping the global financial landscape. Recognizing patterns in why cryptocurrencies fail can help investors steer clear of potential pitfalls while embracing those with genuine promise and utility.
Notable Examples of Dead Coins
The cryptocurrency graveyard is filled with coins that once sparkled with promise. According to CoinGecko, over 9,500 coins have 'died' since 2021. In fact, 2021 saw a staggering 5,724 dead coins. But projects like BitConnect and Confido became infamous for their dramatic collapses.
BitConnect (BCC)
BitConnect (BCC) was a cryptocurrency project that gained significant attention during the 2017 bull market. It claimed to offer high returns through a lending and trading platform, promising investors guaranteed profits. However, BitConnect was widely criticized for being a Ponzi scheme and a fraudulent project. In January 2018, BitConnect abruptly shut down its lending and exchange platform, citing legal issues and regulatory scrutiny.
Following its closure, the value of BitConnect's token (BCC) plummeted, resulting in significant financial losses for investors. Numerous lawsuits and investigations were launched against BitConnect and its promoters, and the project remains infamous within the cryptocurrency community as one of the most notorious scams in the industry's history.
Confido (CFD)
Confido (CFD) was a cryptocurrency project that gained attention in late 2017 for its promise to create a blockchain-based solution for package tracking and smart contracts in the logistics industry. However, shortly after raising funds through an Initial Coin Offering (ICO), the project's website, social media accounts, and team members disappeared without explanation. Investors quickly realized they had been defrauded, as the project failed to deliver on its promises and the team behind it vanished with the funds raised.
Confido's token (CFD) became worthless, and the incident served as a cautionary tale about the risks associated with investing in ICOs and unproven cryptocurrency projects. The founders of Confido were subject to legal action and investigations, and the project remains infamous within the cryptocurrency community as one of the many ICO scams that occurred during the 2017 bull market.
How to Spot a Potential Dead Coin Early
What leads to a downfall of a coin? Many factors are at play here: from negligible trading volumes, low investor interest to developer abandonment. Identifying these potential failures early on is crucial for any savvy investor.
Trading Volumes
Trading volumes are like the pulse of a cryptocurrency, signaling its health and activity in the market. A project that starts strong but sees trading volumes dwindle might be an early distress signal. A lack of financial support and few places to trade often lead to a downturn, leaving ventures exposed. The key takeaway? Always keep an eye on trading volumes as they can let you know if a project is losing steam or staying alive against all odds.
Developer Activity
A bustling team behind a cryptocurrency indicates ongoing innovation and problem-solving efforts - essential ingredients for long-term viability. Conversely, when developer activity fades, it often means updates are stalled and bugs aren't being fixed; this could mean interest has waned or resources have dried up. Avoid projects where silence replaces once lively engagement on GitHub or community forums – it’s usually not just developers taking a vacation but rather waving red flags at investors.
Liquidity & Listings
Imagine a bustling marketplace. Now, replace the goods with digital currencies and you've got an exchange. What breathes life into this bustling digital bazaar, ensuring it doesn't just survive but flourishes? Liquidity. Cryptocurrencies rely on liquidity like a fish needs water; without it, they risk fading into obscurity.
A coin needs listings on reputable exchanges with high liquidity to ensure it doesn't just sit collecting digital dust. This is because most digital currencies struggle to bring real value without it. In fact, issues like low liquidity are why many holders find their assets lacking worth. Being active on these platforms often reflects a level of trust and optimism investors have regarding the potential growth of a digital asset.
Conclusion
So, you've journeyed through the shadowy world of dead coins. But despite numerous setbacks, it's essential to recognize that the path to groundbreaking discoveries frequently involves navigating through a series of mistakes and learning from them. In the realm of digital currencies, every stumble is a stepping stone, offering insights that ignite future breakthroughs.
Cryptocurrency traders remain optimistic because each failure narrows down what doesn't work, paving the way for strategies that do. As trading volumes grow on leading exchanges with high liquidity such as Wirex, it becomes clear: these aren't mere trends but signs of an evolving ecosystem ready to tackle current challenges head-on.
FAQ
Which crypto are dead?
Cryptos considered dead lack updates, volume, and community interest. Many started with hype but fizzled out fast.
Which crypto coin has fallen the most?
The biggest falls often hit those promising quick riches—BitConnect and Squid Game Token famously crashed hard.
What is a dead coin worth?
A dead coin's value plummets to nearly zero. It becomes more of a lesson than an asset.
Disclaimer
The information contained herein has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal, or investment advice. Wirex and any of its respective employees and affiliates do not provide financial, legal, or investment advice.
The value of cryptoassets may fluctuate significantly over a short period of time. The volatile and unprecedented fluctuations in price may result in significant losses over a short period of time. Any Cryptoassets may decrease in value or lose all its value due to various factors including discovery of wrongful conduct, market manipulation, change to the nature or properties of the Cryptoasset, governmental or regulatory activity, legislative changes, suspension or cessation of support for a Cryptoassets or other exchanges or service providers, public opinion, or other factors outside of our control. Technical advancements, as well as broader economic and political factors, may cause the value of Cryptoassets to change significantly over a short period of time.
