Token Creation Slows Despite Bitcoin Rally

November 8, 2023

New Crypto Token Creation Hits 3-Year Low Amid Market Maturation and Regulatory Scrutiny

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The creation of new cryptocurrencies has slowed to its lowest point in 3 years.

Excluding memecoins, only 293 new tokens were listed on CoinMarketCap in the third quarter, a stark decline from the 1,261 tokens during the bull market's peak in late 2021. This decrease mirrors the broader contraction in the crypto space, also reflected by a significant drop in venture-capital funding for blockchain ventures.

CertiK co-founder Ronghui Gu attributes this slowdown to the ongoing 'crypto winter,' suggesting that developers may be waiting for a more favorable market.

The industry's sluggishness has been evident in company downsizing, highlighted by NFT marketplace OpenSea's recent 50% staff cut.

However, there are signs of a revival, with Bitcoin and other major altcoins rallying in October and cryptocurrency investment funds seeing an influx of $767 million in fresh capital, marking the best performance since 2021.

FundStrat analyst Sean Farrell interprets the reduction in new token launches as a sign of industry maturation, where the competition for liquidity is fiercer, raising the bar for launching new tokens.

Moreover, increased regulatory scrutiny in the U.S. is seen as a deterrent for new launches, adding to the cautious approach by potential issuers. This cautious stance marks a shift from the less regulated early years of the crypto industry's 14-year history.

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