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Total number of cryptocurrencies approaches 20,000 despite the crypto carnage

Despite the massive crypto sector correction, developers appear not deterred moving forward to introduce new digital assets in the market.

As of June 17, the number of cryptocurrencies joining the market was nearing a record 20,000, with the figure standing at 19,911. By using a web archive tool, Finbold has determined that in 2022 alone, the number of new cryptocurrencies grew by 3,674 or 22%, according to CoinMarketCap data

The total number of digital assets, June 17, 2022. Source: CoinMarketCap/Wayback Machine

Although the crypto market is relatively new, having existed for over a decade, the number of tokens has already surpassed publicly listed companies in the Americas by almost double. 

This shift can be attributed to the lack of clear regulations governing new crypto projects rollout.

Lack of clear regulations driving crypto new tokens 

In this line, individuals can seamlessly launch tokens into the market without following the strict regulatory scrutiny by entities like the Securities Exchange Commission. 

Notably, the number of new cryptocurrencies has accelerated in 2022 after the sector recorded significant growth in 2021, with assets like Bitcoin hitting an all-time high. However, since the start of 2022, the sector has been in a meltdown losing its capitalization by over 55%.

One of the driving factors for the crypto market growth is the perception that the current bearish momentum will soon fade with new projects aiming to profit from a potential rally. Additionally, amid the dip, most investors tend to pump more money into different cryptocurrencies, an aspect that might be inspiring new token rollout. 

Regulations likely to impact emerging cryptocurrencies 

In the future, the focus will be on how cryptocurrency launches will be affected, especially with more jurisdictions enacting new laws to govern the sector. 

Furthermore, the lack of regulations has inspired bad actors to take advantage of the market to profit from unsuspecting investors. For instance, the Terra (LUNA) crash has cast doubt on the viability of the crypto market. Notably, the token’s founder, Do Kwon, has come under the spotlight for alleged fraud leading to the ecosystem crash. 

Elsewhere, the new tokens seek to emulate established cryptocurrencies like Bitcoin and Ethereum, which have established use cases such as DeFi on Bitcoin or other complementing blockchain solutions in the market. However, analysts opine that as the sector grows, most of the upcoming assets will be wiped out for lack of utility. 

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