CoinGecko experts have calculated the total number of crypto assets. Today there are over 2.52 mln crypto assets, or 5.7x higher than their number at year-end 2021 when the total stood at 440,000. Why has there been such an exponential increase? What is the reason for it?
Here are some key reasons explaining the rapid growth of crypto assets over the past year:
1. Simplified launch of tokens. Platforms like Pump.fun are making the process of creating new tokens easier and more accessible. This has led to surges in the launch of new meme coins, especially during meme coin seasons. For example, in May 2023, 104,000 new tokens were created, and in March 2024 this record was shattered when 195,000 new tokens were issued during the month.
2. Development of online trading of crypto assets. Increased accessibility to trading crypto assets through various platforms is also encouraging the rollout of new coins and tokens.
3. The overall trend towards tokenization of various real blockchain assets. The crypto industry is seeking to move as many traditional assets onto the blockchain as possible, a trend that also contributes to the growth of crypto assets.
Not all these 2.52 mln crypto assets are useful or liquid as they include some relatively temporary meme coins, as well as dead tokens. Therefore, the growth in the number of crypto assets in and of itself does not necessarily mean healthy development of the industry. It is also important to evaluate their actual utility and liquidity.
Notably, the oversupply of crypto assets is a concern as it has the potential to exert a negative impact on the market. Mass creation of low-liquidity or even worthless meme coins can dilute market liquidity and hinder its healthy development.
Regulatory measures could help streamline the market in the following ways:
1. Banning or restricting the listing on exchanges for 80% of less useful crypto assets. This would contribute to the concentration of trade on higher quality and liquid projects.
2. Tightening listing requirements on exchanges. More stringent selection criteria could weed out unscrupulous or ill-conceived projects.
3. Encouraging liquidity for top coins. This would help maintain market depth and stability without scattering investor funds across hundreds of low-liquidity assets.
Such measures could help improve the health of the cryptocurrency market by protecting investors from excessive risk and speculation. It would be interesting to hear the opinions of regulators and major market participants on this issue.
Overall, the current surge in the creation of new crypto assets, especially meme coins, reflects speculative activity in the crypto space and not necessarily long-term fundamental trends. Sooner or later, the crypto industry will have to start weeding out the less useful projects.