Sebastian Sinclair


<p>Last year was a rough one for crypto. To say the least.&nbsp;</p>



<p>This year, the long-term viability of the protocols that survived — if not unscathed — remains in doubt, according to a new report encompassing a decade of data.&nbsp;</p>



<p>Research compiled by educational outlet CoinKickoff shows more than 90% of digital assets spun up since a previous crash in 2014 have since been abandoned by investors and developers alike.</p>



<p>Hot on the heels of a bitcoin surge in 2013 — when the cryptocurrency leapt from $150 to a November peak of $1,000 — <a href="https://coinkickoff.com/wp-content/uploads/01_Volume-of-Dead-Crypto-Coins-by-Start-Year.png" target="_blank" rel="noreferrer noopener">roughly 793 new tokens</a> joined the fray by the end of the following year. </p>



<p>According to CoinKickoff <a href="https://coinkickoff.com/dead-crypto-coins/" target="_blank" rel="noreferrer noopener">research</a>, most newcomers met their eventual demise due to dipping trading volumes or even abject abandonment. There’s at least one notable surviving exception: meme asset dogecoin (<a href="https://blockworks.co/price/doge" target="_blank" rel="noreferrer noopener">DOGE</a>).</p>



<p>“Many opportunistic attempts to corner the early crypto market ended in failure,” the research platform said in its report, Along those same lines, data from “dead coin” follower <a href="https://www.coinopsy.com/" target="_blank" rel="noreferrer noopener">Coinopsy</a> found digital assets tend to have remarkably short lifespans — averaging just 15 months. </p>



<p>More than half of all coins introduced every year between 2013 and 2018 no longer exist, according to CoinKickoff.</p>



<p>Coinopsy defines dead coins as cryptocurrencies that have been used as scams, experienced prolonged downtime on an associated website or nodes, lack social updates or possess low trade volume.</p>


<div class="wp-block-image">
<figure class="aligncenter is-resized"><img decoding="async" loading="lazy" src="https://lh6.googleusercontent.com/-Eq3ss4yuPA7D7g2KjOKfBUSQU3M_WCLXmDSLnPKJYp6TANS7ltQchhNQkVJXvCi47SYp5rXmxJzrPO75PCSno_HUpJMghc8JwiGXdmjNWO13kdDdbj8_Rpo_-tvS-XSyLd5vXBSz9apsZsVj8wOYr-U50Zdp9vmlAsvwD4Wa3e2M1jmTlFBPugXtQ5ABg" alt="" width="611" height="955"/><figcaption class="wp-element-caption">Source: CoinKickoff</figcaption></figure></div>


<p>Then, of course, came the ICO era, which all but took over digital assets in 2017. That’s also when bitcoin reached new all-time highs around $20,000. And those 365 days marked the emergence of scammers from the digital woodwork.&nbsp;</p>



<p>Of all newly created coins that year, 17% turned out to be fake (typically created to “pump the bags” of their creator) — the highest figure ever recorded.</p>



<p>By comparison, roughly 10% of all coins created in 2015 were deemed fraudulent, while in 2018, 9.6% of newly created coins were designed to fleece investors, data shows.</p>



<p>The silver lining is that just 16 cryptos launched in 2020 have since gone under — perhaps one indicator that the industry is growing up.</p>



<p>Backing that sentiment, trademark attorney Mike Kondoudis<strong> </strong><a href="https://twitter.com/Blockworks_/status/1611014635276091395" target="_blank" rel="noreferrer noopener">found</a> that recent US crypto trademark applications have ballooned to 5,383, a 50% year-over-year jump, from 2021 to 2022. The picture is far from total.</p>



<p>Over 12,000 individual cryptocurrencies are now on the market. History would suggest most are destined to fail or fade away. Bitcoin’s resiliency over the years has proved the asset class’ <a href="https://twitter.com/CryptoMo/status/1611129873820524544?s=20&amp;t=rPWqLvLEcuiLGBZJ86eeMg" target="_blank" rel="noreferrer noopener">staying power</a>, though significant investor pitfalls remain. </p>



<p>In each subsequent bear market triggered by a significant event — as seen by FTX, Three Arrows Capital and crypto lenders in 2022 — regulation tends to stiffen.</p>



<p>Most projects now avoid launching an ICO and instead opt for other means to raise funds — courtesy of a <a href="https://medium.com/hackernoon/initial-coin-offering-ico-death-regulation-b615a7cb6b97" target="_blank" rel="noreferrer noopener">tightening regulatory regime</a> in the US and worldwide, as well as prosecutors and securities regulators doubling down on their scrutiny of those methods. </p>



<p><a href="https://blockworks.co/news/cftc-racked-up-crypto-enforcement-record-in-past-year">US prosecutors</a> have begun to increasingly target bad actors, scammers and hackers while exchanges have had to address hurdle after hurdle to prove their legitimacy and viability when it comes to listing tokens for the first time. </p>



<p>Though dead coins over time remain a threat to any investor’s portfolio, the crypto regulation is <a href="https://techcrunch.com/2022/11/27/lawyers-see-crypto-regulation-coming-in-2023-because-industry-needs-to-rebuild-trust/#:~:text=Lawyers%20see%20crypto%20regulation%20coming%20in%202023%20because%20industry%20needs%20to%20rebuild%20trust,-Jacquelyn%20Melinek%40jacqmelinek&amp;text=Despite%20an%20uneven%20year%20in,restore%20trust%20in%20the%20industry." target="_blank" rel="noreferrer noopener">slowly changing</a>. Still, a growing chorus of digital asset proponents of late have been parsing the likelihood of those incremental shifts going from zero to 60.</p>



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Crypto’s Dead Coins Are Portfolio Pitfalls, Though 2023 Proves Hopeful

Macauley Peterson

<div id="highlights-block_61b8868480cf9" class="highlights">
        <ul>
                <li>Musk was named TIME’s Person of the Year on Monday and said that Dogecoin is “better suited for transactions [than bitcoin]”</li>
                <li>An early Tuesday morning tweet sent DOGE prices rocketing higher within a few minutes</li>
            </ul>
    
</div>



<p>Elon Musk is once again moving markets with a fresh round of pro-Dogecoin comments proliferating on Twitter.</p>



<p>TIME Magazine announced its 2021 Person of the Year award for Musk, on Monday. The consequent social media blitz included a Tweet featuring the celebrity CEO discussing cryptocurrency in the context of his expertise on money, stemming from his involvement in the early days of digital payments service PayPal. As <a href="https://cms.blockworks.co/?s=elon+musk" target="_blank" rel="noreferrer noopener">he has done before</a>, Musk used the opportunity to criticize bitcoin as a currency and promote his favorite crypto hobbyhorse, Dogecoin.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Watch: TIME&#39;s 2021 Person of the Year <a href="https://twitter.com/elonmusk?ref_src=twsrc%5Etfw">@elonmusk</a> discusses cryptocurrency <a href="https://twitter.com/hashtag/TIMEPOY?src=hash&amp;ref_src=twsrc%5Etfw">#TIMEPOY</a> <a href="https://t.co/FfwEGxW7LX">https://t.co/FfwEGxW7LX</a> <a href="https://t.co/5BXAZky0LS">pic.twitter.com/5BXAZky0LS</a></p>&mdash; TIME (@TIME) <a href="https://twitter.com/TIME/status/1470378129575325700?ref_src=twsrc%5Etfw">December 13, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>“Even though it was created as a silly joke, Dogecoin is better suited for transactions,” Musk said, arguing that Dogecoin supports a higher number of transactions per day. And while it is inflationary in its issuance, he added, “that’s actually good because it encourages people to spend rather than sort of hoard it as a store of value.”</p>



<p>But what can folks buy with their DOGE? Well, Musk provided one answer for that in a Tuesday morning tweet to his 65 million followers:</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Tesla will make some merch buyable with Doge &amp; see how it goes</p>&mdash; Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1470703708677840896?ref_src=twsrc%5Etfw">December 14, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>The market did not wait for details before buying up DOGE like a Model 3 sedan. In the six minutes following Musk’s tweet, the uber-memecoin rocketed 27%, a pace indicative of twitter-watching bots taking full advantage.</p>



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/695Yx4O78uX_MmxdqzvY0ZURJUNJG3B_Sd14sCvptmn8HMgvpd3wkBOmmqGBe74GfKLuVqt-eT0P7_XcjsNXII6UFAemJlc0ToYDew1Jb2fEc3Hn0EHl2qM7eArb3nzZuPQ41H-k" alt=""/><figcaption>DOGE/USD on the 1-minute timeframe. Musk&#8217;s tweet came at 10:34 UTC.</figcaption></figure>



<p>The price of DOGE has remained elevated in the hour since, holding above 20 cents.</p>




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<p>Musk’s outlook on bitcoin follows the store-of-value narrative that has predominated of late, notwithstanding the <a href="https://cms.blockworks.co/btc-price-flat-after-taproot-lightning-network-continues-to-grow-markets-wrap/" target="_blank" rel="noreferrer noopener">growth in Bitcoin’s Lightning network</a>.</p>



<p>“I could really sort of wax on about the nature of money for hours…there are very few people that understand it better than me. Bitcoin is an interesting example — obviously the prime mover on this — but the transaction volume on bitcoin is low and the cost per transaction is high. It is, at least at its base level, suitable for a store of value, but fundamentally bitcoin is not a good substitute for transactional currency,” Musk <a href="https://time.com/person-of-the-year-2021-elon-musk/" target="_blank" rel="noreferrer noopener">told TIME</a>.</p>



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