In the fast-paced world of cryptocurrency, a common refrain among skeptics and newcomers alike is that Bitcoin isn't truly scarce because, as they claim, "anyone can launch their own token." This argument, seemingly logical on the surface, fundamentally misses the point. While the technical act of spinning up a new digital coin can indeed take mere minutes, the challenge of building a robust, resilient, and widely adopted network is an entirely different beast.
Bitcoin developer Jameson Lopp eloquently captured this distinction shortly after CoinGecko unveiled its comprehensive 2025 "dead coins" report. He observed that while copying code is trivial, replicating a vast network of dedicated users and established infrastructure is an insurmountable task. This insight crystallizes a tension that has defined the crypto landscape since Bitcoin's inception: the stark contrast between abundant token issuance and the scarcity of genuine, sustainable networks.
The Unprecedented Wave of Crypto Failures
CoinGecko’s latest data transforms the "anyone can launch" argument into a stark, measurable reality. According to their analysis of tokens tracked on GeckoTerminal between July 2021 and December 2025, a staggering 53.2% are now inactive. This represents approximately 13.4 million failures out of 25.2 million listed projects. The year 2025 alone bore the brunt of this crypto culling, accounting for an astonishing 11.6 million of those deaths, or 86.3% of all recorded failures within the dataset.
This was no gradual decline; it was an accelerated purge. The fourth quarter of 2025 witnessed 7.7 million tokens fade into obscurity, a relentless pace of roughly 83,700 failures every single day. To put this into perspective, the entirety of 2024 recorded 1.38 million failures. The acceleration in 2025 was profound, with the year's death toll running 8.4 times higher than the previous year, compressing what might have been multi-year churn into a mere twelve months.
CoinGecko largely attributes this dramatic fourth-quarter spike to the October 10 leverage washout, an event that wiped out a colossal $19 billion in leveraged positions, triggering what the firm described as a historic market drawdown. The total crypto market capitalization plummeted by 10.4% year-over-year, settling at roughly $3 trillion, with the fourth quarter alone experiencing a 23.7% decline. Bitcoin itself saw a 6.4% decrease, while gold surged by 62.6%, a divergence that starkly underscored macro risk-off pressures hitting speculative assets the hardest.
Scarcity: Beyond the Code, Into the Network
Lopp's astute observation cuts through a common conceptual misunderstanding. Bitcoin's scarcity isn't rooted in the complexity of its underlying software. Instead, it arises from the immense difficulty of coordinating millions of humans around a shared set of rules that they collectively agree to uphold and not alter opportunistically. While forking Bitcoin's codebase is indeed trivial, forking the social consensus, trust, and credibility that underpin its status as neutral money is anything but.
The dead coin data powerfully illustrates this principle. Millions of tokens were launched, many leveraging low-friction platforms like Pump.fun or various launchpad ecosystems that drove issuance costs down to near zero. GeckoTerminal's tracked project count ballooned from 428,383 in 2021 to over 20.2 million by the close of 2025. Yet, their survival rate plummeted.
CoinGecko defines a "dead" token as one that recorded at least one trade but no longer sees active exchange. This definition specifically excludes purely minted tokens that never even reached the trading phase. Even with this filter, the failure rate stubbornly remained above 50%. The primary bottleneck, it turns out, wasn't launching a token, but sustaining its liquidity and commanding enough attention for it to matter in the long run.
"The bottleneck wasn't launching, but sustaining liquidity and attention long enough for a token to matter."
This dynamic maps directly onto what makes Bitcoin's network truly scarce. Bitcoin benefits from a compounding moat: a colossal security budget funded by miners processing over a decade of transactions, a global web of exchanges and custody providers, derivatives markets deep enough to absorb institutional hedging, payment rails integrated into merchant infrastructure, and a robust developer ecosystem that prioritizes protocol stability above all else. Competitors can certainly replicate the code, but they simply cannot replicate this installed user base or the credible, unyielding commitment to its foundational rules. Network effects scale nonlinearly, a principle echoed by models like Metcalfe's Law, where network value grows proportionally to the square of its active participants. The implication is clear: top networks capture a disproportionate share of value, and most new entrants never achieve escape velocity.
When Liquidity Meets Stress: The 2025 Reckoning
The dramatic die-off of 2025 wasn't solely a consequence of oversupply. CoinGecko's annual market recap paints a picture of a system under severe macro pressure. While speculative assets bled, stablecoins remarkably grew by 48.9%, adding $102.1 billion to reach over $311 billion in circulation. Centralized exchange perpetual volumes soared to $86.2 trillion, up 47.4%, and decentralized perpetual volumes hit $6.7 trillion, a staggering 346% increase. The infrastructure for settlement and leverage continued to scale, yet the sheer breadth of tokens participating in this activity narrowed sharply.
This created a bifurcated market. Tokens that genuinely served settlement functions or captured authentic trading interest survived and even thrived, while those relying on ephemeral hype cycles or thin liquidity were utterly crushed when risk appetite retreated. October's liquidation event served as an extreme stress test, mercilessly revealing which projects had real demand and which existed merely as placeholders in overly speculative portfolios. The fourth-quarter failure rate powerfully suggests that the vast majority of tokens fell into the latter category: assets launched on the optimistic assumption that attention and liquidity would naturally follow, but which ultimately failed to build the distribution or incentive alignment robust enough to weather a market drawdown.
It's worth noting that CoinGecko's methodology excludes tokens that never traded, counting only those that graduated from platforms like Pump.fun and registered some activity. This implies that the true universe of minted-but-failed tokens is likely even larger than the reported 13.4 million. The broader lesson here is undeniable: getting listed is easy, but staying relevant and active is the true, unforgiving filter.
What Comes Next? Scenarios for 2026
If 2025 established a harsh baseline for token mortality under severe market stress, 2026's trajectory will hinge on whether issuance patterns adapt or if the same destructive dynamics persist. Three plausible scenarios map out the potential range of outcomes:
- High Churn Continues: This scenario assumes that low-friction launchpads remain dominant, speculative issuance stays cheap, and another significant liquidity shock similar to October 2025 occurs. This could lead to another 8 million to 15 million failures, essentially mirroring 2025's structure where abundant issuance meets constrained demand, treating last year's extinction event as a repeatable outcome.
- Market Consolidation: Here, market participants become more discerning, demanding deeper liquidity and longer track records from projects. Platforms might tighten listing standards, and traders could concentrate their activity in fewer, more established venues. This path envisions failure counts dropping to 3 million to 7 million as quality filters take stronger hold, suggesting the market has learned to price survival risk more accurately.
- Bifurcation with New Issuance: This path combines a surge in new issuance, driven by innovative distribution channels like wallet-integrated launches, social trading hooks, and Layer 2 expansions, with an even sharper winner-take-most distribution. While issuance may be high, only a small subset achieves true network effects. Failures could land in the 6 million to 12 million range, with successful projects capturing an even greater share of value.
These ranges are not definitive predictions, but rather plausible bounds considering observed quarterly volatility and the 2024 baseline. The 7.7 million failures in 2025's fourth quarter represent a stress-quarter ceiling, while 2024's 1.38 million offers a lower bound for non-extreme conditions. The actual outcome will largely depend on evolving macro conditions, platform incentives, and critically, whether the market truly internalizes the lessons of 2025 or is doomed to repeat them.
The Network Cannot Be Cloned
Jameson Lopp's fundamental point, that one can copy code but not networks, resonates even more powerfully in light of CoinGecko's grim data. Bitcoin's scarcity is not undermined by the proliferation of millions of alternative tokens; rather, it is unequivocally reinforced by their overwhelming failure rate. Each dead coin represents an attempt, ultimately unsuccessful, to replicate the network effects, credibility, and extensive infrastructure that took Bitcoin over a decade of continuous effort to meticulously build and solidify. Most of these attempts couldn't even sustain trading activity for a single year.
The 2025 data quantifies what many seasoned crypto participants intuitively understood: issuance is abundant, but genuine survival is exceptionally scarce. Macroeconomic stress simply accelerated this natural selection process, but the underlying dynamic existed long before October's liquidation cascade. Tokens that lacked strong distribution, significant liquidity depth, or ongoing incentive alignment were inevitably filtered out. Meanwhile, the core infrastructure of the crypto market continued to scale, concentrating activity in the assets and systems that proved their resilience.
Ultimately, Bitcoin's true moat isn't its open-source codebase. It's the incredibly credible, highly liquid, and infrastructure-rich network that countless competitors can launch against, but can never truly copy. The code is freely available, but building and maintaining such a network costs everything.
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