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There Are Already 800 Dead Tokens

cryptocurrency

Being a cryptocurrency investor can be very frustrating these days as the current value of Bitcoin is simply around 30% of its all-time high in December. In 2017, Bitcoin was able to reach almost $20,000. However, it even traded below $6,000 this week. And for this reason, many are comparing cryptocurrencies to the dotcom bubble back in the early 2000s.

Is It a Bubble?

If you will consider the number of digital tokens that have become worthless, you may think that the market isn’t looking good. New digital tokens are created via ICO wherein investors can buy the coin issued by the company. It’s a common initiative among investors to buy coins at a very cheap price in order to get bigger returns in the future.

In 2017, there’s around $3.8 billion raised via ICOs. However, in 2018, ICOs have come up with $11.9 billion making ICOs bigger this year than last year. Unfortunately, there are over 800 digital tokens that are already worthless. These tokens trade at less than 1 cent.

In addition to this, there is also increased scrutiny in the entire crypto market. ICOs have been mostly considered by the SEC as securities while Bitcoin and Ethereum are the only cryptos that have been considered by the agency as securities.

Among the 800 dead tokens include the Detector Token that has no communication whatsoever for over 8 months now. In addition to this, there is also SipsCo Coin which died after just ten days on coinexchange. You also have the likes of Bchconnect that has been called a “lending scam coin”.

According to crypto analyst Aaaron Brown, he said that “There has obviously been significant fraud and hype in the ICO market. I have seen 80 percent of ICOs were fraud, and 10 percent lacked substance and failed shortly after raising money”. He also added that most of the remaining 10 percent will probably fail as well”.

Just how bad is the problem with ICOs? There is one study that says 1 in every 5 ICO is considered a scam. You also have the Data from Satis Group that says over 80% of ICOs that have raised $50 million in market capitalization are scams. In addition to this, 11% of projects have gone silent.

There was a reported ICO scam called Gaza earlier this year that was able to raise around $2 million. Despite negative publicity and increased scrutiny on ICOs, there are those that still believe that this can be a great alternative to a public offering.

Bitcoin on a Bearish Trend

Unknown tokens aren’t the only ones losing value today. You also have Bitcoin that has lost a significant value this year. Though there isn’t one event that caused Bitcoin price to slide down, among the recent events that caused Bitcoin price to go down are regulatory changes and also hacking incidents.

There are those investors and experts that remain optimistic regarding the entire crypto market. In fact, Arthur Hayes who is the CEO of BitMEX mentioned that Bitcoin could actually climb to $50,000 this year. Could this actually happen once there’s regulatory clarity and institutional investors are already involved?

Janneke Eriksen

Janneke is a writing ninja and has vast experience in journalism, specifically in the crypto space. As a blockchain believer and avid Bitcoin fan, she’s incredibly excited to share to our readers the latest news around so they are always updated wherever they are.

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