Scams were one of the most common causes of cryptocurrency fatalities, accounting for more than 500 coins to far.
This is the conclusion of Traders of Crypto’s latest analysis, which looked at over 2,300 “dead” cryptocurrencies to see what caused so many of them to fail.
A visit to the crypto cemetery
The crypto industry has officially buried about 2,400 cryptocurrencies as of January 2022. According to statistics by Traders of Crypto, almost 1,000 of them have perished in the last two years alone.
The harsh climate of 2020’s DeFi summer, which saw the demise of hundreds of initiatives, can be blamed for at least part of the 71 percent increase in the number of dead coins.
Table showing the five most common reasons for coins dying (Source: Traders of Crypto)
According to the report, 1,596 coins were declared dead owing to abandonment or a lack of circulation. This indicates their trade volume has remained below $1,000 for three months in a row, or their websites have been shut down or abandoned by developers.
The crypto industry’s rapid development has no patience for initiatives that fall behind, therefore the high number of tokens that have died as a result is unsurprising.
What is surprising is the quantity of tokens that have perished as a result of scams.
The survey found 528 fake coins, ranging from multibillion-dollar Ponzi schemes to low-volume pump-and-dump schemes. Coins that perished as a result of hacks and thefts are also included in this category, albeit the quantity is substantially lower than founder-led schemes.
The biggest scam coins in crypto history (Source: Traders of Crypto)
Over $7.1 billion had been lost to cryptocurrency frauds by January 2022. Only $6 billion of the $7.1 billion was lost to two scams: OneCoin and BitConnect.
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