Crypto issuance has hit a new all-time high in the crypto market, sparking fears over liquidity. According to some crypto analysts, the lack of investor liquidity is worrying, highlighting the new feat that occurred in January. According to Gecko terminal data shared by co-founder and chief operating officer of CoinGecko, Bobby Ong, there were over 600,000 new digital assets launched in January. According to Ong’s post, the feat represents a 12-fold rise from the same period in 2024. In his post, Ong mentioned that in 2022-2023, about 50,000 new tokens were being minted every month, with Q4 2024 seeing a rapid increase with 400,000 new tokens per month. However, it is looking like 2025 will be the year of new tokens, with January seeing 600,000 new tokens created. CoinGecko’s Ong discusses the surge in crypto issuance According to Ong’s post , most of the new tokens created in the market were a result of platforms like Pump.fun. The Solana-based platform provided traders, even inexperienced ones, with an avenue to create their tokens. This way, the platform takes away the technical and complex aspects, opening users up to a world where they can create their tokens and launch them in minutes. 1/ The token explosion is real. 🚀 On @GeckoTerminal , we now track 209 chains, 1,450 DEXes, and nearly 5.5 million tokens. But the real shocker? The rate at which new tokens are being created. 👇 — Bobby Ong (@bobbyong) February 14, 2025 Ong mentioned that at this rate, the market should be prepared to have about one billion tokens in the next five years. In addition, he also added that the boom is resonating across other sectors, with the decentralized exchange (DEX) boom still going strong. For instance, he mentioned that about five new chains, which are mostly EVMs, are launched every month, with May 2024 seeing a monthly high of 17 new chain launches. According to Gabriel Halm, a research analyst at crypto platform IntoTheBlock, the growing crypto issuance is natural proof of the bullish sentiment in the crypto market. This means that there is a natural perception that most tokens will thrive upon creation before they settle at a price range. Liquidity concerns trail the increase in new token issuance According to Halm, most of these new tokens show disjointed price actions, which happens as a result of the spread of investor attention and liquidity. The thin liquidity is also reflected in the wider crypto market, with more established altcoins failing to see the momentum to propel them back to the highs they last saw in 2021. Analysts have also predicted that the altcoins season may encounter a delay due to the dispersion created by the increase in digital assets. In previous bull markets, profits from Bitcoin’s rally often flowed into Ethereum propelling it to rally, before moving into smaller cap tokens, leading them to follow the leading cryptocurrency’s price action. However, Halm mentioned that the growing appetite from institutional players is changing the way that the market operates. “Alongside the near exponential growth of new crypto assets, the emergence of traditional finance institutions as an actor in the space will inevitably alter the liquidity rotations seen in previous cycles, reforming how capital flows in the crypto space,” Halm said. In response to a user who cited the dangers of liquidity fragmentation, Ong mentioned the fragmentation of liquidity as the leading cause of issues related to the lack of momentum in the crypto market. “Too many tokens, each spreading the limited attention and liquidity of traders even thinner. That’s why we don’t see the great alt pumps of previous cycles,” he added. Cryptopolitan Academy: How to Write a Web3 Resume That Lands Interviews - FREE Cheat Sheet
