Recent data from CertiK, a blockchain security firm, indicates a notable slowdown in the creation of new cryptocurrencies, reaching its lowest pace in three years.
According to information shared by CertiK and reported by CoinDesk on Wednesday, the third quarter experienced the creation of the fewest new tokens since the beginning of 2021. The data, compiled using CoinMarketCap information, excludes memecoins—speculative tokens lacking clear use cases—from the calculations.
In the third quarter of this year, only 293 new tokens were added, marking a decline from 366 in the previous quarter and 449 during the same period the previous year.
This decline stands out, especially when compared to the peak of the crypto bull market in the fourth quarter of 2021, where CoinMarketCap data indicated the launch of 1,261 new tokens.
Aligns with industry trend
The recent findings align with other reports emphasizing the challenges faced by the crypto industry during last year’s market downturn.
For instance, a report from Mike Novogratz’s digital asset management firm, Galaxy Digital, earlier this year highlighted the “extremely challenging” environment for crypto venture capital funding. The report noted five consecutive quarters of decline in funding and stated that the investment amount marked the low for the current cycle. It was also reported as the lowest amount invested on a quarterly basis since Q4 of 2020.
The overall sentiment expressed in the report emphasized the persistently difficult conditions for crypto venture capital fundraising.
‘A sign of crypto winter’
Commenting on the deceleration in new token launches to CoinDesk, CertiK co-founder Ronghui Gu suggested that the slower pace might indicate a broader trend of caution within the industry.
He remarked, “It may still be a sign of crypto winter where everyone has paused developing and launching, waiting for the arrival of spring.” This analogy reflects a period of cautiousness and reduced activity in the crypto space, similar to how winter symbolizes a dormant phase in nature.