As of early April 2024, over 540,000 new tokens have been created, with an average daily increase of 5,300. As the market saturation continues to rise, filtering through altcoins becomes crucial.
(Previous Summary: Methodology for Investing in Altcoins: Abandoning Emotion, Formulating Theme Strategy)
(Background Supplement: Practical Experience: 4 Key Techniques for Trading Altcoins)
Table of Contents
How Many Types of Cryptocurrencies Are There?
Number of New Tokens
Meme Coin Seasonal Effect
What Drives This Saturation?
How to Find Direction in a Saturated Market?
Don’t Be Too Attached to the Tokens You Hold
Final Thoughts
The saturation of altcoins has reached unprecedented levels. But how severe is it exactly? I read CoinGecko’s latest report to find answers. “In the ocean full of opportunities, investors are eager to obtain high returns.”
As of 2024, there are over 2.5 million cryptocurrencies, a 5.7-fold increase compared to 440,000 in 2021. By the end of 2022, this number reached 1.15 million, a year-on-year growth of 159.2%. By the end of 2023, it further increased to 1.98 million, a 72.3% growth.
As of early April 2024, over 540,000 new tokens have been created, with an average of 5,300 tokens created each day. Since 2023, this ratio has exceeded half a million new tokens.
May 2023 set a record with 104,000 token issuances, but March 2024 reached a new high of 196,000.
These surges highlight the activity in the Meme market, where thematic and derivative tokens emerge rapidly.
@GiganticRebirth suggests one potential reason is the imitation of successful projects. In this rapidly developing industry, success breeds imitation, leading to the rapid creation of numerous derivatives in pursuit of higher returns.
As saturation rises, filtering through altcoins becomes crucial. It is increasingly difficult to find quality projects in the complex market each week.
@0x_Kun proposes five criteria:
– Macro narrative
– Increasing user base
– Strong community
– Low unit bias
– Clear value proposition
Winning the selection does not guarantee success. Many people have lost profits due to being too attached to the tokens they hold. During the 2020-2021 period, 70% of the listed 11,000 tokens failed. Similarly, during the 2017-2018 period, 70% of the over 3,000 tokens failed.
Despite the rapid market saturation, opportunities still exist for smart and hardworking individuals.
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