The number of new tokens entering the cryptocurrency market is increasing as the market matures.
According to data provided to ULTCOIN365 by cryptocurrency trading simulator Crypto Parrot, approximately 13 new digital currencies were created daily between September 2020 and September 2021. During this time, 4,908 new cryptocurrencies were released, bringing the total number of coins to 12,046.
According to the data, the number of new cryptocurrencies entering the market in the last 12 months has increased by 68.75 percent from 7,138 in September 2020.
The highest growth rate in new coins was 146.98 percent between September 2019 and September 2020, with coins increasing from 2,890 to 7,138.
Several factors have contributed to the recent increase in the number of cryptocurrencies. The rising value of the sector, on the other hand, could be the primary contributor.
The cryptocurrency sector, led by Bitcoin, has increased in value over the last year, with the asset reaching a new all-time high of 64,800 in April.
At one point, the industry as a whole had a market capitalization of $2 trillion. As a result, more creators sought to capitalize on the growth by introducing new tokens into the market.
At the same time, with the push towards the mainstream, the sector has provided an opportunity for new creators. The industry has seen an influx of institutional investors, indicating that it is maturing.
Notably, new assets emerged during the coronavirus pandemic, which saw digital currencies gain favor as a hedge against economic turmoil. In general, despite the fact that stocks crashed at some point, the crypto markets remained resilient. The potential to drive the economy may have resulted in the creation of new coins.
The Function of Utility Tokens
Utility cryptocurrencies such as Ethereum, which are at the heart of the growth, must not be overlooked. Such tokens evolve as infrastructure, allowing other cryptocurrencies to be built on top of their networks, facilitating the entry of new coins into the market.
With the growth of Decentralized Finance in the last year, the role of utility cryptocurrencies has also taken center stage. In the midst of the DeFi boom, new projects have emerged, with their native utility tokens establishing on platforms such as Ethereum.
Despite the fact that a large number of cryptocurrencies have emerged, not all of them have good intentions. During the recent rally, some projects intend to defraud unsuspecting users.
Furthermore, some digital currencies may fail because they are shunned by the public and fade away.