It’s raining cryptocurrencies for investors to experiment with. The first half of 2021 has turned out to be an outlier with the number of new cryptos listed on the crypto tracking and crypto-related data aggregation platforms. For instance, CoinMarketCap added 2,655 new crypto assets to its database during H1 2021, up from 2,000 coins in 2018 to take up the tally of coins listed to 10,810, according to CoinDesk. In comparison, this indicated an average of only 1,538 coins were added during every six-month period of 2019 and 2020. Likewise, Singapore-based CoinGecko added 3,064 new assets on its portal while Poland-based crypto research platform Coinpaprika listed 2,000 new assets to its database.
“Whenever there is a new concept or trend or a use-case being identified using blockchain technology, then it starts to get traction over a period of 6-12 months, and then there is a boom when we see a lot of projects in that category coming into the industry. Given the easier way to raise money is through initial coin offering (ICO) and things move very fast when it comes to fundraising to building to delivering, we see thousands of such projects at once and all of these tokens getting into the market,” Sathvik Vishwanath, Co-founder and CEO, Unocoin told Financial Express Online.
The influx of new coins is a deja vu for the industry. CoinDesk noted that a similar jump in new assets was recorded after the ICO boom in 2017. However, over three-quarters of those ICOs were proven to scam even as almost half couldn’t raise funds. “2017 was the first boom when it comes to technology and fundraising in the crypto space. Projects with just a plan alone raised tens of millions of dollars. However, as any knowledgeable investor could anticipate, just 2-3 per cent of them survived for four years and these turned out to be very strong projects today. Long-term survival projects are the ones that continue to deliver their projected road map over a few years at least,” added Vishwanath.
As of August 10, 2021, 11,206 coins were listed on CoinMarketCap and 8,825 coins were listed on CoinGecko. On the other hand, Coinpaprika had 3,675 active coins. According to data from CoinMarketCap, the market cap of total cryptocurrencies listed on its platform had peaked to $2.5 trillion on May 12, 2021, before it plummeted to $1.1 trillion on July 20. The market cap stood at $1.86 trillion with Bitcoin’s dominance at 46.81 per cent and Ethereum’s 19.97 per cent, at the time of filing this report.