CoinGecko Reports Spike in Crypto Token Failures Amid Market Turmoil

A recent CoinGecko report reveals that around 25% of crypto tokens launched since 2021 have failed, with 1.8 million collapsing in Q1 2025 alone. This is attributed to market instability and easy token creation, largely influenced by the Pump.fun platform, which has flooded the market with low-effort projects. Compared to previous years, token failures are significantly increasing, raising concerns about future sustainability in the crypto space.

Summary
The cryptocurrency space has witnessed an alarming increase in token failures, with nearly 1 in 4 new tokens launched since 2021 failing in the first quarter of 2025, according to CoinGecko. This stark downfall is linked to market volatility and an oversaturation of easily created tokens. In April, CoinGecko highlighted that 3.7 million of the nearly 7 million listed tokens have ceased trading, emphasising a growing trend in digital asset fragility.

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A fresh report from CoinGecko indicates that around 25% of all crypto tokens that embarked on their journey since 2021 have met their untimely demise in the first quarter of this year. This surge in failures coincides with a broader market downturn, made worse by the sheer ease of creating new tokens in recent times. Shockingly, CoinGecko’s research shows that nearly 1.8 million tokens collapsed just in early 2025, marking it as the worst year to date for crypto failures.

According to Shaun Paul Lee, a research analyst at CoinGecko, the data reveals that more than half of the 7 million cryptocurrencies tracked by their platform, GeckoTerminal, have already stopped trading. This represents a significant shift in the cryptocurrency landscape, suggesting a dire future for many newly minted tokens.

Lee linked these contractions to heightened market instability following notable events, like Donald Trump’s inauguration in January. The early months of this year saw Bitcoin reach new heights, only to plummet shortly after, causing chaos across the crypto space.

Last year, we witnessed an astonishing 1.3 million token failures, but it seems this year is set to top that. Lee pointed out that prior years had a considerably lower failure rate, which indicates that the number of tokens—and their inevitable failures—has ballooned in an unprecedented fashion.

The influx of new cryptocurrencies is partially attributed to platforms like Pump.fun, launched in January 2024, which has significantly streamlined the token creation process. This ease of use has led to an influx of memecoins and ventures that lack substantial backing or purpose. CoinGecko noted that Pump.fun has contributed greatly to the recent token surge, with over 3 million new tokens appearing last year alone, compared to a mere 835,000 in 2023.

Interestingly, before Pump.fun’s emergence, failures in the crypto sector were reported in the lower six digits. Lee emphasised that the spike in failures from 2021 to 2023 represented just 12.6% of all crypto failures over the last five years. Furthermore, Pump.fun’s graduation rates have historically been troubling, with around 98% of tokens failing to move beyond the platform’s environment.

Despite its popularity, the best performance recorded by Pump.fun was in November 2024, where a staggering 1.67% of memecoins transitioned to open market trading. Bob Ong, CoinGecko’s founder, indicated a cooling interest in memecoins, stating that investor enthusiasm has waned significantly following a series of poor token launches, particularly a fallout from the Libra token’s introduction.

Pump.fun enjoyed a brief surge in trading volume following the debut of Trump’s memecoin on January 18, but soon after, both crypto and stock markets faced severe volatility stemming from Trump’s tariff threats. The volatility reflects the fragile nature of the current crypto ecosystem, posing worrying questions about sustainability.