The fall of the cryptocurrency market led to a decrease in the activity of traders. 12,100 tokens and cryptocurrencies in 2022 became zombie status – no trades were made with them for more than a month.
According to analysts at Nomics, 2022 was a record year for the number of “zombie tokens.” Most cryptocurrency projects issue their own tokens, and often even several different types of tokens. But during the fall of the cryptocurrency market, investors and traders try to get rid of little-known digital coins to protect themselves from falling assets.
Nomics representatives stressed that there were too many shocks this year – the collapse of the Terra ecosystem, the bankruptcy of hedge fund Three Arrows Capital and cryptocurrency lender Celsius.
During such events, traders try to be cautious and avoid obscure and illiquid tokens.
“During the bull trend in 2021, the cryptocurrency industry had a lot of money, it attracted attention and liquidity for new and existing projects. However, during a prolonged bear trend, even good and useful projects experience difficulties as they lose access to capital and funding,” reasoned CryptoCompare analyst Jacob Joseph.
Of course, the vast majority of such “zombie tokens” are extremely small personal projects made for interest, or short-term assets for margin trading. The Nomics platform currently tracks 64,400 assets, of which only 13,800 have traded in the past week. Among these tokens are many assets that are extremely close to zombie status.
Cryptocurrency investor Aaron Brown believes there will be more and more of these half-dead projects and tokens. You don’t need a big team, office or real estate to launch your own project and token. Consequently, many will fall into oblivion as quickly as they appeared. However, Brown notes, there is no limit to the number of different tokens in the cryptocurrency space, so it’s a natural process.
As a reminder, the Internet believes that “bitcoin is dead.