how many crypto project will disappear by end 2024

Answered at Sep 18, 2024

Crypto Project Attrition: Estimating Disappearances by End of 2024

Introduction

The cryptocurrency landscape is notoriously volatile and ever-changing. As we approach the end of 2024, it's crucial to assess the potential attrition rate of crypto projects. While precise numbers are difficult to predict, analyzing current trends and expert opinions can provide valuable insights into the likely scale of project disappearances.

Factors Contributing to Project Disappearances

Several key factors are likely to influence the number of crypto projects that will cease to exist by the end of 2024:

  1. Market Consolidation: As the crypto space matures, stronger projects are likely to absorb or outcompete weaker ones.

  2. Regulatory Pressures: Increased scrutiny from regulatory bodies may force non-compliant projects to shut down.

  3. Technological Obsolescence: Rapid advancements may render some projects technologically irrelevant.

  4. Funding Challenges: Projects unable to secure ongoing funding or achieve profitability may be forced to close.

  5. Market Sentiment: Prolonged bear markets can lead to project abandonment.

Estimating the Scale of Disappearances

While exact numbers are speculative, we can make educated estimates based on historical trends and current market conditions:

  1. Historical Precedent: During the 2018 crypto winter, an estimated 1,000+ projects ceased operations. Given the increased number of projects since then, we could expect a higher number of disappearances in a similar market downturn.

  2. Current Market Saturation: As of 2023, there are over 20,000 active cryptocurrency projects. It's reasonable to assume that a significant percentage of these will not survive long-term.

  3. Expert Predictions: Industry analysts have suggested that up to 90% of existing crypto projects could fail in the long run. While this is a broad timeframe, it indicates the potential scale of project attrition.

  4. Market Cycles: Cryptocurrency markets are cyclical. If 2024 experiences a prolonged bear market, we could see accelerated project disappearances.

Quantitative Estimates

Based on the available information and market trends, we can provide a range of estimates for crypto project disappearances by the end of 2024:

  • Conservative Estimate: 2,000 - 3,000 projects
  • Moderate Estimate: 4,000 - 6,000 projects
  • Aggressive Estimate: 7,000 - 10,000 projects

These estimates take into account the current market size, historical attrition rates, and potential market conditions in 2024.

Specific Project Types at Risk

Certain categories of crypto projects may be at higher risk of disappearing:

  1. Meme Coins: Projects like Dogecoin and Shiba Inu, which rely heavily on social media hype, may struggle to maintain relevance.

  2. Underdeveloped DeFi Protocols: As the DeFi space becomes more competitive, projects without strong fundamentals or unique value propositions may fail.

  3. Stablecoins with Weak Backing: Following the collapse of TerraUSD, stablecoins without robust collateralization may face increased scrutiny and potential failure.

  4. NFT Projects: The oversaturation of the NFT market may lead to the disappearance of many speculative or low-quality NFT projects.

Potential Impact on the Crypto Ecosystem

The disappearance of numerous crypto projects could have several effects on the broader ecosystem:

  1. Market Consolidation: Stronger projects may absorb users and resources from failed ones, leading to a more concentrated and potentially stable market.

  2. Improved Investor Confidence: The elimination of weaker or fraudulent projects could enhance overall trust in the crypto space.

  3. Regulatory Response: A high rate of project failures may prompt increased regulatory oversight of the crypto industry.

  4. Innovation Focus: Surviving projects may need to demonstrate clear use cases and technological advantages, potentially driving innovation in the space.

Conclusion

While it's impossible to predict with certainty how many crypto projects will disappear by the end of 2024, the estimates range from 2,000 to 10,000 projects. This significant attrition rate reflects the highly competitive and volatile nature of the cryptocurrency market. Investors and participants in the crypto space should remain vigilant, focusing on projects with strong fundamentals, clear use cases, and robust development activity to navigate this period of potential consolidation and transformation in the industry.