In 2025, over 1.8 million crypto projects failed, marking an unprecedented failure rate in the industry. A CoinGecko report reveals that 52.7% of all cryptocurrencies created since 2021 are now defunct, largely due to lack of utility and high volatility. Experts suggest conducting detailed research before investing in any cryptocurrency and warn against projects promising unrealistic returns, as they are often doomed to fail.
A recent report by CoinGecko reveals a startling trend in the cryptocurrency market, indicating that more than 1.8 million crypto projects collapsed in just the first three months of 2025. This marks the highest yearly failure rate documented in the industry so far. Since 2021, a staggering 52.7% of cryptocurrencies have failed, often due to a lack of genuine utility and reliance solely on speculation for survival.
This alarming data showcases serious issues within the digital asset sector. Specifically, the CoinGecko analysis highlights that most crypto projects launched since 2021 have ceased to exist by March 31, 2025. The failure rate is attributed to the unsustainable nature of many of these projects, which were often created without a legitimate purpose, primarily as speculative investments.
Experts note that once the initial excitement fades, these tokens can plummet in value, leading to their owners and significant holders abandoning them. As regulations tighten globally, many weaker projects are expected to struggle even more as they abandon their efforts. Price volatility presents another significant threat. Sharp fluctuations around cryptocurrency prices can erode investor confidence, prompting withdrawals and subsequent project failures.
Additionally, ‘rug pulls’—instances where developers deceive investors and flee after securing funds—further destabilise the market and contribute to the high failure rate among crypto projects. CoinGecko, however, suggests that not all is bleak. Some projects are flourishing despite the prevalence of failures, particularly those addressing real-world problems and exhibiting a robust structure.
The ongoing integration of blockchain technology across diverse sectors, including finance, supply chains, and gaming, illustrates a positive evolution within the industry. Nevertheless, CoinGecko strongly advises potential investors to conduct thorough research before engaging with any project. Key aspects to investigate include the project team, its whitepaper, and the level of community involvement.
Lastly, it’s advisable for investors to steer clear of projects that promise suspiciously high returns, as these often lead to disappointments when the projects inevitably encounter issues. The cryptocurrency landscape is certainly tumultuous, and a careful approach is essential for navigating its complexities.
