Key Takeaways
- Over 3,000 cryptocurrencies have failed since 2014, with an average of 947 failing every year.
- Failed projects include OneCoin, BitConnect, BoringCoin, and GetGems.
- To avoid potentially failing coins, investors should research the founders, the plan, benefits, and ecosystem of the project, and check for a social media presence.
- The crypto industry has massive potential, but investors should only invest what they can afford to lose, do their research, and use a reputable crypto exchange.
Cryptocurrency was meant to be the efficient, faster, and cheaper solution to the payment industry. While several crypto projects have contributed to achieving this laudable objective, many have failed miserably too. How many cryptocurrencies have failed and why did they fail? Keep on reading to find out!
Over 3,000 cryptocurrencies have failed since 2014
An average of 947 cryptocurrencies fail every year, according to popular cryptocurrency ranking website CoinGecko. Based on statistics from the past five years, this number is only getting higher. Back in 2014, only 19 cryptocurrencies failed or were considered dead. But after the recent bull run in 2020 and massive global hype, countless crypto projects were launched. Unfortunately, over 3,000 cryptocurrencies died in 2021 alone.
Exchanges or overview websites follow a particular methodology to determine whether any asset is dead or irrelevant. As per CoinGecko, an asset is considered dead if it does not have any trading activity in the past two months. Also, if the officials themselves deactivate the project or the project is found to be a scam or a rug and pull scheme, it is delisted from the platform and considered dead.
OneCoin (One)
Launched in 2014 as the “Bitcoin Killer”, OneCoin was one of the earliest pyramid schemes in the crypto industry that resulted in the loss of billions of dollars. The founder, Ruja Ignatova who crowned herself the crypto queen, claimed that no one would even talk about Bitcoin in the next two years because of OneCoin.
She convinced thousands of investors from all over the world to invest in her company, and eventually disappeared with over $4 billion in stolen funds. As of now, no one knows her whereabouts, and she has become one of the most wanted fugitives on the FBI’s list.
BitConnect (BCC)
BitConnect was a crypto project launched in 2016 with a somewhat worthwhile and interesting goal to allow users to lend the actual value of BCC for interest payments. The project gained immense growth and popularity all over the internet. The value of the asset rose from 17 cents to a staggering $463.
The project also promised unbelievably high-interest rates to users who lent their assets to the platform. It was later discovered that BitConnect was a Ponzi scheme funded by high payouts from new investors coming in. Things soon took a turn for the worse, and the entire BCC ecosystem crashed, resulting in its value decreasing to mere cents.
BoringCoin (ZZZ)
True to its name, BoringCoin was considered a boring coin. Even its officials said that BoringCoin would remain stable without any big promises, value pumps, dumps, and more. The coin died within a year of its release. It was taken as a joke coin by the whole crypto community and did not have any trading volume. BoringCoin did not even have a purpose or an ecosystem that could benefit holders or investors. So eventually, it had to die.
GetGems (GEMZ)
GetGems was one of those crypto projects that started out right but failed to gather momentum later on. It was launched as a social messaging application for mobile users that rewarded them with GEMZ tokens for inviting their friends to the platform. The project got so much hype after its release in 2015 that it generated around $1 million in crowdfunding. After just two years of its release, GEMZ lost its stature and collapsed when it completely stopped trading.
How to recognize potentially failing coins?
Failed projects like the ones mentioned above do not change the fact that the crypto industry has massive potential. There are projects that are working towards the betterment of the industry and can grow a lot in value. So how can you invest your money in promising projects instead of potentially failing coins? Check out the tips below:
Conclusion
A popular saying in the crypto industry goes, “Only invest what you can afford to lose.” The crypto industry is highly volatile, but with high risk comes high reward. If you can recognize good projects and avoid the dodgy ones like the 3,000 failed coins, you can make some decent profits. Just do your research, never invest too much, take out profits whenever you can, and use a reputable crypto exchange.