The End of the 'Easy Mode' for Altcoins: Finding Direction in a Saturated Market
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The End of the 'Easy Mode' for Altcoins: Finding Direction in a Saturated Market
Despite the market quickly becoming saturated, opportunities still exist for those who are smart and hardworking.
Navigating Web3 tides with focused insightsAuthor: Crypto, Distilled
Compiled by: TechFlow
The level of altcoin saturation has gone through the roof. But just how severe is it? I read CoinGecko's latest report to find out. "In an ocean full of opportunities, investors are eager for high returns."
How many cryptocurrencies are there?
As of 2024, there are over 2.5 million cryptocurrencies—an increase of 5.7 times compared to 440,000 in 2021. By the end of 2022, the number reached 1.15 million, a year-on-year growth of 159.2%; by the end of 2023, it further rose to 1.98 million, up 72.3% year-on-year.
Number of new tokens:
By early April 2024, more than 540,000 new tokens had been created, averaging 5,300 per day. Since 2023, this rate has already surpassed half of the 830,000 new tokens.
Meme coin seasonality:
May 2023 set a record with 104k token launches, but March 2024 raised the bar with 196k.
These surges highlight the vibrancy of the meme market, where thematic and derivative tokens rapidly emerge.
What’s driving this saturation?
GCR believes one potential reason is copying successful projects. In this fast-moving industry, success breeds imitation, leading to a flood of derivatives being rapidly created in pursuit of higher returns.
How to navigate in a saturated market?
As saturation increases, filtering altcoins becomes critical. Each week, identifying quality projects amid the market noise grows increasingly difficult.
@0x_Kun proposed five criteria:
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Grand narrative
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Expanding user base
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Strong community
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Low unit bias
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Clear value proposition
Don’t get too attached to your holdings
Winning picks don't guarantee success. Many people lose profits by holding on too tightly to their tokens. Between 2020–2021, 70% of the 11,000 listed tokens failed. Similarly, between 2017–2018, 70% of over 3,000 tokens failed.
Final thoughts
Despite rapid market saturation, opportunities still exist for those who are smart and work hard.
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