Almost 5,000 new cryptocurrencies launched in the last 12 months
22 Sep, 2021 CryptoParrot
As the cryptocurrency industry continues to mature with mainstream adoption, investors are pumping more money into the sector contributing to the sector’s popularity. At the same time, new cryptocurrencies joining the market to capitalize on the interest is also on the rise.
According to data provided by cryptocurrency trading simulator Crypto Parrot, between September 2020 and September 2021, new 4,908 cryptocurrencies have launched bringing the cumulative number of coins to 12,046. Therefore, over the last 12 months, the number of new cryptocurrencies has grown 68.75% from September 2020's figure of 7,138.
Elsewhere, the highest growth rate was recorded between September 2019 and September 2020 at 146.98%, from 2,890 to 7,138. The number of cryptocurrencies is provided by CoinMarketCap.com database with historical figures retrieved using the web.archive.org tool.
Drivers for the emergence of new cryptocurrencies
The number of new cryptocurrencies created over the last 12 months is remarkable, considering that a decade ago, only Bitcoin was available. Overall, the emerging cryptocurrencies seek to leverage blockchain technology to revolutionize various sectors like finance, payments, machine learning, art, among others.
The sector has surged in value at one point, hitting a cumulative market capitalization of about $2 trillion. The popularity spiked as digital currencies entered into the mainstream, backed by institutional investors. Notably, the entry of institutions is partly contributing to the sector's maturity, and creators of new coins don't want to miss out on the opportunity for more returns.
Significant growth was recorded in September last year amid the coronavirus pandemic. During the crisis, the economy plunged, with the stock market dropping to a historical low at some point, but cryptocurrencies largely remained resilient. Notably, digital currencies emerged as a possible cushion against the economic crisis, potentially inspiring new coins that joined the market.
Additionally, the emergence of utility cryptocurrencies like Ethereum also plays a factor in increasing digital currencies. Utility coins develop as infrastructure, allowing other cryptocurrencies to be built on top of their networks.
The emergence of new coins accelerated in 2017 amid the Initial Coin Offering frenzy. However, the same environment has been replicated in the last 12 months amid the Decentralized Finance boom.
With DeFi projects aiming to bridge the gap between cryptocurrencies and traditional finance, emerging platforms come with a native token. In this case, most DeFi projects have utilized utility cryptocurrencies like Ethereum to launch their coins.
The emergence of crypto scams
Worth pointing out is that some of the captured new cryptocurrencies don't intend to contribute positively to the sector. With an unclear regulatory landscape globally, some of the emerging projects have become scams aiming to benefit from the crypto rally.
Interestingly, most cryptocurrencies usually launch with a lot of fanfare but later fail as the public and investors shun them. Notably, as of May this year, over 2,000 cryptocurrencies had failed.
Overall, the emergence of new cryptocurrencies does not translate to success. Only a few coins will survive, especially for those focusing on mainstream adoption and notable use cases.
Bitcoin records 3x higher average trading volume in October than Apple, Amazon, Microsoft
After experiencing increased volatility in late September, Bitcoin (BTC) appears to be regaining its momentum towards another all-time high…2mins 12 Oct, 2021 CryptoSlashy
Goldman Sachs, Wells Fargo among stocks that outperformed Bitcoin in 2021
The rise in Bitcoin's popularity has increasingly positioned the asset as a formidable investment product directly competing with traditional stocks. Despite recording significant returns, some traditional stocks have outperformed Bitcoin in 2021.…2mins 29 Sep, 2021 John_Trevors
Ethereum adds over 38 million new addresses in 2021, 22% of all ever created
The Ethereum network plays a key role in the cryptocurrency circles, with the asset recording significant interest.…2mins 14 Sep, 2021 CryptoParrot
Blockchain-related job postings surge 118%, software development sector leads at 30%
The focus on cryptocurrency and blockchain technology has been growing in recent years as organizations explore how to leverage the industry’s full potential.…2mins 31 Aug, 2021 CryptoParrot
Recommended crypto exchange
Buy & sell Crypto in minutesLearn more