Shakeout Time: Half Of All Cryptocurrencies Are Gone

Since 2021, 3.7 million cryptocurrencies have stopped trading. Some critics of the crypto community are using that figure to declare that “HA! See? It’s all a pyramid scheme, told you!” But before you panic, you don’t need to look that far back in history to realise that this is in fact, a not a crisis, but a much-needed cleanse. The crypto world is going through its "dot-com bubble" moment, and to quote Lizzo: It’s about damn time.

The parallels between today’s crypto market and the late 1990s internet boom are so similar it’s almost laughable that anyone would think this is crypto’s end. Back then, companies with little more than a flashy website and a ".com" suffix were raising millions overnight, regardless of whether they had a viable business model or not. Investors, caught up in the frenzy and the fomo, poured money into ventures that were little more than PowerPoint presentations with stock photos. Pets.com became the poster child of this era. They burned through $300 million in funding before collapsing in less than a year, remembered today only for its sock puppet mascot. Over 90% of companies that were born during the dot com era vanished soon after. But from the wreckage emerged giants like Amazon, Google, and eBay. The companies that actually delivered real value. Crypto is now undergoing the same painful but very necessary evolution.

The past few years have been the golden age (or dark age, depending on who you ask) of memecoins and speculative garbage tokens. Platforms like Pump.fun turned cryptocurrency creation into a meme factory, allowing anyone with an internet connection to launch a token in minutes; no utility, no whitepaper and no doxxed team required. The result was a flood of nearly 7 million cryptocurrencies since 2021, many of which were purely pump-and-dump schemes, rug pulls, or outright ‘jokes’. At the peak of the memecoin frenzy in late 2024 (which we have covered before on this channel), only a tiny fraction of these tokens -about 1.67% - survived longer than a few weeks. Today, that number has crashed below 1%, and the first quarter of 2025 alone saw 1.8 million projects fail. That’s nearly half of all crypto deaths in the past four years happening in just three months. 

These tokens failed thanks to a combination of greed, naivety, and a market that rewarded speculation over substance. Many tokens were created with no real utility, existing solely as vehicles for speculation. Others were outright scams, with developers hyping a project only to disappear overnight with investors’ money - the classic ‘rugpull’, if you will. Even those tokens that weren’t outright frauds often succumbed to a liquidity crunch, with trading volumes so low that they couldn’t sustain any real price movement. The market became oversaturated with projects that had no reason to exist, and now the reckoning has finally arrived.

But as I said, this isn’t a story of doom and gloom. In fact, it’s the exact opposite! The collapse of these worthless tokens is a sign that the market is maturing, finally separating the wheat from the chaff. Just as the dot-com crash cleared the way for the tech giants of today, this crypto shakeout is paving the way for projects with real utility to thrive. Bitcoin, Ethereum, XRP and Solana aren’t just surviving - they’re growing stronger, because they offer something of actual value. Bitcoin continues to solidify its position as digital gold, Ethereum is still managing to hold on as the backbone of decentralized finance - though its not without its healthy competition. Solana is quickly becoming that very competition, while XRP is miles ahead as the coin to reinvigorate the global financial system. These projects aren’t just riding the hype cycle; they’re building the infrastructure for the next phase of the internet. 

What’s really happening is a fundamental shift in investor behavior. After years of getting burned by rug pulls and dead-end projects, money is finally flowing toward cryptocurrencies with real technology and use cases. The days when a token could moon simply because it had a cute dog mascot or a celebrity endorsement are fading fast. Even the hype surrounding major events - like Donald Trump’s inauguration earlier this year - couldn’t save the flood of garbage tokens launched in its wake. Investors are waking up to the reality that slapping a token on something doesn’t automatically create value, just as investors in 2000 realized that having a website didn’t automatically make a business valuable.

This shakeout is also a reminder that most tokens were never meant to last. They were quick cash grabs, riding the speculative waves of a market that was too young to know better. Their disappearance isn’t a tragedy - it’s a necessary purge, creating space and capital for legitimate innovation. The dot-com crash didn’t kill the internet; it killed the parasites that were holding it back, and the same is true for crypto. The projects that survive the future will be leaner, stronger, and finally ready for mainstream adoption.