In the past 18 months, more than 800 cryptocurrencies have been launched which are now dead. These new cryptocurrencies coins are created when companies engage in a process called the initial coin offerings or ICO. A startup offers investors to buy their coin. This is done not for an investment purpose but as a method of buying the company’s product. The ICOs are offered at a low price and promise a huge value in return.
Cryptocurrency tracking website, CoinSchedule has shown that companies raised $3.8 billion via ICOs in 2017 and this amount reached $11.9 billion very soon. However, many of these coins are now dead either because they were either scams, jokes or the product which was promised by the company was never delivered. Deadcoins.com is a site which tracks all the crypto-coins which have died. The list has already over 800 dead digital tokens enlisted. To reach the dead coins list, the coins must be trading at less than 1 cent. Bitcoin, the most famous cryptocurrency is currently trading at 70% less than its record high of almost $20,000 last year.
The rise and fall of Bitcoins made some observers to draw comparisons with Nasdaq’s sharp fall in 2000. The lost of trust in the sector is blamed on the hacking of two very famous South Korean cryptocurrency exchanges. ICOs also have a bad reputation for being risky and there are many stories of startups who ran off with investor’s cash. There are still some people in the industry who believe that ICOs can offer an alternative to traditional initial public offerings. Even though Bitcoin underperformed, however, there are still hopes that the coin will regain its worth. Arthur Hayes, CEO of cryptocurrency exchange BitMEX said that he believes Bitcoin can climb to $50,000 by the end of this year.
An influential investor, Warren Buffet, has told the media several times that the end of Bitcoins is very near. He said, “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending. When it happens or how or anything else, I don’t know.”