Over half of all cryptocurrencies released since 2021 have tanked, further emphasizing the dangers associated with the highly unstable crypto market. Of tokens that are no longer trading at all, a large majority have failed, with the bulk of failures occurring in 2024 and 2025. American investors are losing billions of dollars in these non-starters, highlighting the need for extreme diligence and extensive study.
The almost overnight appearance of so many defunct cryptocurrencies is troubling for a healthy cryptocurrency market and the protection of investors. The volatility of meme coins and pump-and-dump scams have all played a major role in this shocking trend. As the crypto landscape continues to change and develop, it is critical that investors—and regulators—understand the causes behind these failures.
Failure Rate Soars
Data indicates a worrying trend in the cryptocurrency market. The rate of token failures is increasing. More than half of all cryptocurrencies that started from 2021 onward are already dead. In other words, 50% of all tokens launched since 2021 are dead.
As expressed in a recent 2024 BitKE report, this is especially worrisome given the current rate of 75% failures for crypto projects. Fast forward to 2025, and the landscape is much bleaker, as the line between a successful token launch and a failure is nearly indistinguishable. At the close of 2025, 53% of all listed cryptocurrencies had failed, with the majority of collapses occurring primarily in 2024 and 2025.
At the end of 2025, over 1.82 million tokens have stopped being traded. This figure greatly exceeds the approximately 1.38 million failures recorded in 2024. This information highlights the mounting danger of investing in new and unproven cryptocurrencies. In barely the first half of 2025, the amount of tokens that have failed completely would have soared. This increase foreshadows a potentially larger wave of project attribution and failure in the years to come.
Factors Contributing to Token Deaths
There are many reasons why 90 percent of all cryptocurrencies launched end up failing. This reality is shaped by a multitude of factors ranging from market dynamics, fraudulent schemes, and the basic altruism of developing successful, sustainable projects. Common issues causing project failure Binance’s spokesperson noted a number of common problems that they say cause projects to fail.
Common factors include inability to find product market fit leading to negligible interest from users or investors, or project teams that focus too much on short-term speculation with no long-term roadmap, and sometimes abandonment by developers (rug pulls). Broader issues like fraudulent intentions, weak user traction, novelty-driven hype, financial shortfalls, poor execution, strong competition, or security failures also contribute to project failure. - Binance’s spokesperson
Coin ecosystems that have a low barrier of entry to creating tokens consistently lead to the greatest percentage of ghost coins. Solana’s meme coin surge drove a flood of new tokens, many of which lost user traction and daily activity once initial hype faded.
Ecosystems with low barriers to token creation see the highest number of ghost coins. In general, platforms that make it very easy and cheap to launch new tokens see the most abandoned coins. During this cycle, Solana’s meme coin surge (e.g., via token launchpads like Pump.fun) drove a flood of new tokens, many of which lost user traction and daily activity once initial hype faded. - Binance’s spokesperson
High-Profile Failures and Investor Losses
After a series of high-profile cryptocurrency crashes that wiped out billions of dollars in investor money. Often these failures are due to outright fraud or Ponzi schemes or projects that just never really had a business model.
OneCoin, which raised about $4 billion, never launched a legitimate blockchain and operated on the back of high-pressure multi-level marketing before imploding. In 2018, BitConnect, then a top-10 cryptocurrency by market capitalization, collapsed spectacularly. It was revealed as a massive Ponzi scheme that had promised its investors nearly 1% returns per day.
BitConnect, once a top-10 coin, collapsed in 2018 after being exposed as a Ponzi scheme promising ~1% daily returns. Investors lost nearly $2 billion. OneCoin, raising ~$4 billion, never had a real blockchain and relied on aggressive multi-level marketing before collapsing. - Binance’s spokesperson
Investors have failed to the tune of almost $2 billion in busted tokens, highlighting both the financial and reputational risks presented in investing in tokens. Indeed, as of March 5, the entire meme coin sector capitalization had tanked to $54 billion. This is a historic drop from its all-time high of $125 billion on December 5, 2024.
The Importance of Due Diligence
With such a high failure rate and the great potential for fraud, doing your due diligence is extremely important to investors. Binance’s new Limited series DYOR is an excellent starting point to help you make informed decisions and stay safe in the ever-changing crypto market.
Practically, this means reviewing the whitepaper, assessing whether the project solves a real problem, verifying the team’s credibility, examining tokenomics and supply distribution, and checking community and development activity. - Binance
Here are the key indicators, by Alsie Liu, Content Manager at Dune Analytics.
A coin is classified as ‘dead’ when it loses all utility, liquidity, and community engagement. Key indicators include near-zero trading volume, abandoned development (no GitHub commits for 6+ months), and a price drop of 99%+ from its all-time high. Teams often vanish without warning—social media accounts go dormant, domains expire. - Alsie Liu, Content Manager at Dune Analytics
By spotting these red flags as early as possible, potential investors can protect themselves from common scams and ghost tokens.
In essence, DYOR is about empowerment and protection. It helps investors identify solid projects and avoid scams or ghost tokens by spotting red flags early. Given how fast crypto markets move, personal due diligence remains essential for navigating the space safely and successfully. - Binance
The Need for Real-World Utility
For cryptocurrency projects to be successful, they should provide out actual, real-world utility and solve practical, tangible problems. A great idea is not enough, and these projects will certainly be competing with deep-pocketed, established Web2 players while facing all sorts of difficult industry headwinds.
This highlights that a good concept alone is not enough; crypto projects must also compete with entrenched Web2 platforms, navigate complex industry challenges, and deliver real-world utility to succeed. Without aligning with user behavior and market needs, even well-intentioned initiatives risk fading into ghost tokens. - Binance
Unless they’re aligned with how people behave and what the market demands, the best intentions can evaporate back into ghost tokens. Cryptocurrency projects must demonstrate their value and relevance to users to avoid becoming another statistic in the growing list of failed tokens.
