The cryptocurrency market is showing signs of improvement, with the total market capital recently surpassing 3 trillion USD. This recovery indicates increasing investor confidence.
However, the sad reality is that many tokens listed this year have died due to a lack of sustainable growth methods.
Are Venture Capitalists to Blame?
Venture capitalists are indirectly killing the cryptocurrency space by choosing to fund new crypto products solely to profit from them. Although this may not seem immediately harmful, it affects the long-term viability of the industry. David Phelps of JokerRace explained how venture capitalists operate in the cryptocurrency field:
"Typically, money from venture capitalists comes from top-down over several years while companies work to generate it bottom-up long-term... but in crypto, that hasn't happened. Companies have taken money from top-down, used it to create a token with a valuation at the venture capitalist level, and then worked to consolidate the token price—with their own token," Phelps tweeted.
However, when market conditions deteriorate, venture capitalists begin to withdraw, and cryptocurrency projects are feeling the consequences. A recent Coingecko research report reveals that over 1.82 million cryptocurrencies failed in 2025 alone, while approximately 1.93 million were successfully listed. This is a significant increase from 2024, when only 1.38 million tokens failed, which is alarming considering 2025 is only halfway through.
Crypto Tokens Listed vs Dead. Source: CoingeckoThe increasing number of failures indicates a shift in the industry's vision. What began as a financial revolution has transformed into a quick profit-seeking gamble. This change has damaged the original purpose of cryptocurrency.
In an interview with BeInCrypto, Hank Huang, CEO at Kronos Research, discussed how cryptocurrency projects can differentiate themselves from scams and establish a stronger stance:
"Starting with a smaller market capitalization attracts investor attention, showing that price and market capitalization are not artificially inflated. By focusing on achievable but interesting milestones, building strategic partnerships, and providing a clear roadmap, trust is built. With the DAO model, the community is empowered to make important decisions, whether choosing product development or prioritizing utility use cases. This approach promotes genuine participation and also shows that we are building together, creating long-term value through collective contribution and collaboration," Huang said.
Finding a Way Forward
One of the primary reasons tokens and projects fail is a lack of focus on revenue. Many venture capitalist-driven projects operate on free money, providing free services until funds run out. This creates an environment where investors are hesitant to pay for similar services, even when more sustainable alternatives exist.
The question is: How can cryptocurrency companies pivot to create business models based on real value and user-driven revenue instead of relying on token price manipulation and hype created by venture capitalists? According to Huang, the answer lies with the companies themselves:
"Cryptocurrency projects should start with a smaller, more manageable market capitalization, avoiding inflated valuations due to short-term hype. The focus must shift from token incentives to genuine revenue models, through fees, services, or user-driven growth. With a clear, achievable roadmap, projects can build slowly but sustainably, avoiding over-promising and under-delivering, instead creating sustainable value over years, not just months," Huang told BeInCrypto.
Simply put, this is a crucial moment for the cryptocurrency market to realign with its original purpose: creating financial independence. This change is necessary to prevent the cryptocurrency market from collapsing into a comprehensive crisis.
