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New Crypto Token Creation Hits 3-Year Low Amid Market Maturation and Regulatory Scrutiny

Token creation slows despite Bitcoin rally

Author

matt kim
November 08, 2023

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The creation of new cryptocurrencies has slowed to its lowest point in 3 years.

Excluding memecoins, only 293 new tokens were listed on CoinMarketCap in the third quarter, a stark decline from the 1,261 tokens during the bull market's peak in late 2021. This decrease mirrors the broader contraction in the crypto space, also reflected by a significant drop in venture-capital funding for blockchain ventures.

CertiK co-founder Ronghui Gu attributes this slowdown to the ongoing 'crypto winter,' suggesting that developers may be waiting for a more favorable market.

The industry's sluggishness has been evident in company downsizing, highlighted by NFT marketplace OpenSea's recent 50% staff cut.

However, there are signs of a revival, with Bitcoin and other major altcoins rallying in October and cryptocurrency investment funds seeing an influx of $767 million in fresh capital, marking the best performance since 2021.

FundStrat analyst Sean Farrell interprets the reduction in new token launches as a sign of industry maturation, where the competition for liquidity is fiercer, raising the bar for launching new tokens.

Moreover, increased regulatory scrutiny in the U.S. is seen as a deterrent for new launches, adding to the cautious approach by potential issuers. This cautious stance marks a shift from the less regulated early years of the crypto industry's 14-year history.

Xage Security: $20M

Cybersecurity company Xage Security raised $20M in a Series B funding round from Valor Equity Partners, Piva Capital, March Capital, SCF Partners, Overture Climate Fund, Chevron Technology Ventures, Science Applications International Corporation (SAIC).

https://xage.com/

Llama: $6M

Access control and governance platform for smart contracts Llama raised $6M in a Seed funding round led by Founders fund, Electric Capital, with participation from Amplify Partners, FJ Labs, Reverie, Elad Gil, Sandeep Nailwal, Stani Kulechov, William Gaybrick, Nathan McCauley, Viktor Bunin, Sina Habibian.

https://llama.xyz/

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