How many cryptocurrencies actually failed during the period 2021–2025?

Since 2021, we’ve witnessed an explosion of new cryptocurrency projects. Thousands of coins have entered the market, driven by investor optimism, the growth of NFTs and DeFi, and low interest rates. Some of them reached market caps of billions of dollars in just a few months. However, as market sentiment cools, an increasingly urgent question arises: how many cryptocurrencies have actually failed and completely lost their value?

Tracking the number of failed projects is not just a statistical curiosity — it’s an important lesson for the entire industry. Identifying the causes of failure helps investors recognize warning signs, improve analysis, and direct capital toward genuine innovation rather than speculative noise.

How do we define a dead cryptocurrency?

Before analyzing the number of failed projects, it’s necessary to clarify what exactly we mean by a “dead” cryptocurrency. A coin considered inactive typically shows a combination of the following signs:

• Delisted from major platforms: The token has been removed from most trading exchanges, effectively ending its trading.
• Community silence: No activity on official channels, no communication from developers, no new messages for months or even years.
• Abandoned repositories: The project’s code on GitHub is no longer updated, suggesting the development team has withdrawn.
• Zero trading volume: Practically no transactions, indicating a complete lack of demand and liquidity.

While a coin doesn’t need to meet every criterion simultaneously, their combination clearly indicates a loss of both technical support and investor trust.

Year-over-year cryptocurrency failures

Data from analytics platforms like CoinGecko show a worrying trend in the number of projects that did not survive subsequent years. Particularly high failure rates were observed:

• In 2021, when speculative frenzy led to the creation of thousands of ambitious (or fraudulent) ideas
• In 2022, when market collapse and panic selling eliminated projects with weak fundamentals
• In the following years 2023–2025, as regulations became stricter and investors more demanding

Without precise statistics, it’s difficult to say exactly how many cryptocurrencies have failed, but estimates suggest that a significant portion of the tens of thousands of projects launched during this period never survived to today.

Squid Game Token and Terra: Two spectacular failures

To understand the scale of the problem, it’s worth examining two well-documented cases of spectacular failure.

Squid Game Token – a financial rug pull

In late 2021, the project capitalized on the popularity of the Netflix series of the same name. Creators promoted Squid Game Token (SQUID) as a play-to-earn game promising investors great returns. The token’s price quickly soared, reaching a peak valuation of about $2,800.

But the truth was different. Shortly after launch, developers carried out a so-called “rug pull” — they withdrew all liquidity from the project, sold all their tokens, and then disappeared. The value of SQUID plummeted from $2,800 to nearly zero, and investors lost every dollar they invested. To this day, the project remains a symbol of hype-driven fraud.

Terra and Luna – an algorithmic stablecoin that couldn’t hold

A more complex case is the collapse of Terra in May 2022. At that time, LUNA was one of the more respected crypto projects, and its algorithmic stablecoin TerraUSD (UST) was supposed to maintain a peg to the US dollar through a mint-and-burn mechanism.

The collapse occurred in three stages:

1. Detachment from the dollar: Large withdrawals and mass transactions broke UST’s stability, making it vulnerable to speculative attacks.
2. Failed rescue attempts: The Luna Foundation Guard tried to restore balance by exchanging billions of USDT and selling Bitcoin holdings. Temporarily, this slowed the crash, but ultimately failed.
3. Hyperinflation and total destruction: When the system failed, UST holders started burning tokens to mint LUNA. Rapid issuance of new LUNA tokens caused hyperinflation, wiping out the value of both UST and LUNA almost to zero.

Investor losses reached billions of dollars, and Terra became a cautionary tale about the risks of poorly secured systems.

Why do cryptocurrencies fail investors?

Behind every failure is a story. The most common causes of collapse include:

Rug pulls and Ponzi schemes

Few things are worse than fraudulent schemes. Rug pulls start with aggressive marketing, fake partnerships, and unrealistic promises to attract unwary buyers. Once enough capital is gathered, the creators simply take the money and disappear.

Similarly dangerous are Ponzi schemes based on new investor funds to pay earlier participants. The system only works as long as new capital flows in — when it stops, everything collapses.

Abandoning projects after raising funds

Some projects, even with good initial intentions, raise millions through public token sales, then the founding team vanishes. Without further development, updates, or communication — the token quickly loses all value.

Sometimes, the reason is simply running out of budget or disillusionment with the product’s feasibility. But the result is always the same: community abandoned, and the token becomes worthless.

Poor tokenomics design

Having an interesting idea isn’t enough if the tokenomics are disastrous. If a project issues too many tokens too quickly, inflation destroys value before adoption occurs. Conversely, tokens without clear utility or incentives to hold (rather than sell quickly) lose significance on the market.

Balanced tokenomics requires a well-thought-out issuance schedule, clear use cases, and mechanisms that genuinely motivate long-term holders.

External factors: hacking, regulatory repression, market crashes

Even legitimate and well-managed projects can fall victim to events beyond their control. Serious exploits can drain liquidity in minutes and damage reputation for years. Sudden regulatory threats may force exchanges to delist tokens. Broader market crashes, like those in 2018 or 2022, can eliminate projects with limited reserves or weak adoption.

Poor communication and lack of community engagement

The survival of a crypto project depends on building and maintaining a loyal community. When developers neglect communication, ignore user concerns, or fail to deliver promised milestones, trust erodes quickly. Without a community — no liquidity, no activity, no future.

Protecting future crypto innovations

How many cryptocurrencies have failed since 2021? The answer is disheartening — a huge number. But this situation doesn’t have to be permanent.

As regulations evolve and investor awareness grows, we can expect improved project survival rates. Clearer legal frameworks may eliminate obvious scams. Experienced investors will be more cautious about hype-driven projects.

This transformation will create a more disciplined market where truly innovative projects — with solid fundamentals, real utility, and strong communities — can thrive. Reliability will depend on thorough due diligence, authentic problem-solving, and committed teams.

The future of cryptocurrencies belongs to those projects that survive market selection — fewer in number, but building on a foundation of trust, stability, and real value rather than speculative frenzy.