13 Million Crypto Projects Have Failed: Is Token Launching Too Easy?
The cryptocurrency landscape is littered with failed projects. A recent report by CoinGecko revealed a staggering statistic: over 13.4 million crypto tokens launched between July 2021 and December 2025 have gone inactive. This raises a critical question – is it too easy to launch a cryptocurrency, leading to market saturation and ultimately, widespread failure? Jameson Lopp, CTO of Casa, succinctly captured the core issue: anyone can copy code, but no one can replicate a thriving network of users and robust infrastructure. This article delves into the reasons behind this mass extinction event, exploring the implications for the future of crypto and what truly drives scarcity in the digital asset space.
The Scale of the Problem: A 2025 Crypto Bloodbath
CoinGecko’s 2025 dead coins report paints a grim picture. 53.2% of all tokens tracked on GeckoTerminal since 2021 are now considered inactive. The year 2025 alone accounted for a massive 11.6 million failures, representing 86.3% of all failures in the dataset. The fourth quarter of 2025 was particularly brutal, witnessing approximately 83,700 tokens fail per day – a stark contrast to the 1.38 million failures recorded across the entirety of 2024. This wasn't a gradual decline; it was a rapid acceleration of project attrition.
The market experienced a 10.4% year-over-year decline in total crypto market capitalization, settling around $3 trillion. The fourth quarter alone saw a 23.7% drop. Bitcoin itself experienced a 6.4% decrease, while gold surged by 62.6%, highlighting a clear risk-off sentiment favoring traditional safe-haven assets. This macro pressure exacerbated the challenges faced by already struggling crypto projects.
Scarcity Isn't About the Code, It's About the Network
Lopp’s observation cuts to the heart of the matter. Bitcoin’s scarcity isn’t derived from the complexity of its code, but from the difficulty of building and maintaining a strong, decentralized network. While forking Bitcoin’s codebase is relatively straightforward, replicating the social consensus, network effects, and established infrastructure is a monumental task. The sheer number of failed tokens underscores this point.
The ease of launching tokens has been fueled by platforms like Pump.fun and various launchpad ecosystems, drastically reducing issuance costs. GeckoTerminal tracked an explosion in project count, rising from 428,383 in 2021 to over 20.2 million by the end of 2025. However, this proliferation of tokens didn’t translate to widespread success. The survival rate plummeted, demonstrating that launching a token is only the first, and easiest, step.
Defining "Dead": Trading Activity as a Key Metric
CoinGecko defines a “dead” token as one that has recorded at least one trade but subsequently experienced no further activity. This definition filters out purely minted tokens that never gained traction, focusing on projects that at least briefly existed in the market. Even with this filter, the failure rate remained above 50%, indicating that the bottleneck wasn’t simply launching a token, but sustaining liquidity and user engagement.
Bitcoin's Moat: A Compounding Advantage
This is where Bitcoin’s inherent scarcity becomes apparent. Bitcoin benefits from a powerful compounding moat built over more than a decade. This moat includes:
- Security Budget: A robust security budget funded by miners processing transactions.
- Global Infrastructure: A well-established network of exchanges and custody providers.
- Deep Derivatives Markets: Sophisticated derivatives markets capable of absorbing institutional hedging activity.
- Payment Rails: Integration into merchant infrastructure for real-world transactions.
- Developer Ecosystem: A dedicated developer community prioritizing protocol stability.
Competitors can copy the code, but they can’t replicate this established base or the commitment to maintaining a stable, neutral monetary network. Network effects, as described by Metcalfe’s Law, scale nonlinearly, meaning that larger networks become exponentially more valuable. This dynamic favors established networks like Bitcoin, making it incredibly difficult for new entrants to gain significant traction.
Liquidity and Stress Tests: The October 2025 Washout
The surge in failures during 2025 wasn’t solely due to oversupply. The October 10th leverage washout, which wiped out $19 billion in leveraged positions, acted as a critical stress test for the entire crypto ecosystem. This event exposed the vulnerabilities of projects reliant on hype and thin liquidity.
While stablecoin circulation grew by 48.9% to over $311 billion, and centralized exchange perpetual volumes increased by 47.4% to $86.2 trillion, the breadth of tokens participating in this activity narrowed significantly. Tokens that provided genuine utility or captured real trading interest survived, while those dependent on speculative bubbles were crushed. The fourth-quarter failure rate highlighted that many tokens were launched on the assumption of continued growth, without building a sustainable foundation.
The Role of Platforms Like Pump.fun
CoinGecko’s methodology specifically includes Pump.fun graduates, but the actual number of minted-but-failed tokens is likely much higher. The 13.4 million failures represent only the subset that reached a basic level of activity before going dormant. This underscores the importance of listing on reputable exchanges and building a strong community.
Looking Ahead: Scenarios for 2026 and Beyond
If 2025 establishes a baseline for token mortality under stress, the trajectory for 2026 will depend on whether issuance patterns change or if the same dynamics persist. Here are three potential scenarios:
- Continued High Churn: Low-friction launchpads remain dominant, speculative issuance continues, and another liquidity shock results in 8-15 million failures.
- Consolidation: Market participants demand deeper liquidity and longer track records. Platforms tighten listing standards, trading concentrates in fewer venues, and failure counts drop to 3-7 million.
- Bifurcation: New distribution channels emerge (e.g., wallet-integrated launches), driving higher issuance, but only a small subset achieves network effects. Failures land in the 6-12 million range, with a steeper winner-take-most distribution.
The actual outcome will depend on macro conditions, platform incentives, and whether the market learns from the lessons of 2025. The 7.7 million failures in Q4 2025 represent a potential ceiling for extreme conditions, while 2024’s 1.38 million offer a lower bound for more stable environments.
The Network Cannot Be Cloned
Jameson Lopp’s point about copying code versus copying networks resonates strongly in light of CoinGecko’s data. Bitcoin’s scarcity isn’t threatened by the existence of millions of alternative tokens; it’s reinforced by their failure rate. Each dead coin represents an attempt to replicate the network effects, credibility, and infrastructure that Bitcoin has painstakingly built over a decade. Most couldn’t sustain trading for even a year.
The 2025 data quantifies a reality that crypto participants intuitively understood: issuance is abundant, but survival is scarce. Macro stress accelerated the sorting process, but the underlying dynamic predates the October liquidation cascade. Tokens lacking distribution, liquidity, or ongoing incentives were filtered out, while the core infrastructure continued to scale, concentrating activity in resilient assets.
Bitcoin’s moat isn’t its codebase; it’s the credible, liquid, infrastructure-rich network that competitors can launch against but can’t easily copy. The code is free. The network costs everything.
Mentioned in this article
Bitcoin 
CoinGecko 
Pump.Fun 
Jameson Lopp