The cryptocurrency market has long been characterized by its volatility and rapid innovation, but new data reveals a troubling trend: approximately one in four crypto tokens launched since 2021 have already failed as of the first quarter of 2025. This alarming statistic was highlighted in a recent report by CoinGecko, a leading crypto data platform.
According to research analyst Shaun Paul Lee, the explosion of new digital assets has contributed significantly to this trend. Since 2021, CoinGecko has recorded nearly 7 million cryptocurrencies on its GeckoTerminal tracking tool, with over half—an astonishing 3.7 million—having ceased trading and now classified as failed tokens.
“Alarmingly, the first quarter of 2025 alone saw the collapse of 1.8 million tokens,” Lee stated, marking it as the highest number of failures recorded in a single year. This spike in failures represents nearly half of all token failures and amounts to 25% of all tokens launched since early 2021.
One key factor in this surge of failures appears to be attributed to broader market turbulence, particularly following significant events such as Donald Trump’s inauguration in January. The market experienced a sharp downturn after an initial peak in Bitcoin prices, which likely contributed to investor insecurity and the subsequent rise in token failures.
The Shift in Token Survival Rates
Interestingly, last year saw the second-highest token failure rate, with 1.3 million tokens collapsing. This is in stark contrast to the relatively lower failure rates observed in the preceding three years.
Lee points to the emergence of user-friendly token creation tools, such as Pump.fun, which simplified the process of launching new tokens. This ease of access has led to an influx of low-effort projects and memecoins flooding the market. Since its launch in January 2024, Pump.fun has played a substantial role in the proliferation of new tokens, resulting in over 3 million being introduced last year alone, compared to just over 835,000 in 2023.
Before the widespread adoption of such platforms, token failures were counted in the low six digits. Between 2021 and 2023, project failures accounted for only 12.6% of total cryptocurrency failures in the last five years, highlighting the rapid escalation of problems faced by newly created tokens.
Notably, Pump.fun’s graduation rate—where tokens transition from the site to independent trading—has been dismally low, with around 98% of its tokens failing to succeed. The platform’s best-performing period was recorded in November 2024, when 1.67% of memecoins made it to the open market.
As CoinGecko founder Bobby Ong noted, investor interest in memecoins seems to have waned due to a series of disappointing launches, further exacerbated by events such as the controversial launch of the Libra token.
Overall, the surge in crypto token failures serves as a stark reminder of the risks inherent in the cryptocurrency market. As new projects continue to emerge, investors should exercise caution and conduct thorough research before diving into the occasionally tumultuous waters of digital currencies.
