Cryptocurrency slump persists: Examining factors that foster project success (Opinion)
The crypto landscape has seen a significant transformation since Satoshi Nakamoto unleashed Bitcoin in 2009. This groundbreaking innovation birthed not just Bitcoin, but a myriad of altcoins. Once considered the next big thing, altcoins now number over 13 million, according to CoinMarketCap, a mind-blowing surge from the 3,000 tracked during the 2017-2018 ICO boom.
These days, established projects like Solana have become the preferred blockchain for memecoins. Gone are the days when projects gained momentum through white papers and tech promises. In today's crowded market, attention is the scarcest resource.
A Quantity Crisis: Value in Short Supply
While the official count of altcoins is 13.24 million, the actual figure likely exceeds 36 million. Yet, the vast majority of these assets are mostly hype-driven, born out of the lingering memecoin mania.
In the industry's evolution, there's been a shift from focusing on the core dev team to creating new products. Today, with protocols allowing for easy token launches, there's a new wave of largely unvetted assets flooding the market.
Despite the explosive growth, the crypto industry continues to grapple with the age-old problem of oversaturation. With countless creators treating token launches as a get-rich-quick scheme, most tokens gain relevance based on short-lived hype and lose it shortly after launch.
The Rise of Storytellers and Meme Lords
In its early days, venture capital firms played a pivotal role in the crypto industry by selectively funding projects with a strong product-market fit. In the altcoin era, VC endorsement was the gold standard for project credibility, with retail investors closely following these market movers.
However, the crypto industry is undergoing a significant shift-away from purely technical development and towards influencer-driven marketing and community-led growth. Today, projects often skip traditional VC funding and instead go straight to communities via DAOs and viral Telegram or Discord groups.
The prevailing trend raises concerns for the industry. With an estimated $70 billion set to be unlocked from vested altcoins this year, further diluting the market valuation, the question is whether altcoins with strong fundamentals can compete against memecoins that offer instant gains.
The Influence of Influencers
Despite the oversaturation and market dominance of memecoins, projects with sustainable revenue models and engaged communities are slowly making a comeback. Attention is becoming as important as the tech itself. Projects can't just build in isolation anymore. They need to figure out how to connect with people, grow real followings, and keep them invested, both literally and emotionally.
Builders who effectively adapt to this transition-shifting dominance from traditional VCs and exchanges to those who shape narratives and mobilize supporters-will find themselves in a more capable ecosystem. They will be the ones defining which tokens thrive and which disappear in a sea of forgotten assets.
Disclosure: This article does not represent investment advice. The content and materials presented here are for educational purposes only.
Forest Bai, co-founder of Foresight Ventures, shares insights into the web3 community, suggesting that innovation and regulatory compliance are essential for projects to thrive in the constantly evolving crypto market. As a trusted voice in the industry, Forest fosters global innovation, backing groundbreaking projects such as Aptos, TON, Morph, and Sei Network.
- The crypto landscape has evolved significantly since Bitcoin's inception in 2009, giving birth to a plethora of altcoins, currently numbering over 13 million according to CoinMarketCap.
- Today, Solana has become a favored blockchain for memecoins, signaling a shift in focus from white papers and tech promises to creating new products and generating attention.
- There exists a quantity crisis in the crypto industry, as the actual count of altcoins is likely over 36 million, yet most are hype-driven and short-lived.
- As a result of protocols enabling easy token launches, the market is flooded with largely unvetted assets, leading to concerns about oversaturation.
- In the altcoin era, projects often bypass traditional VC funding and instead rely on community-led growth, moving away from the industry's technical development roots.
- With an estimated $70 billion set to be unlocked from vested altcoins this year, the competition between altcoins with strong fundamentals and memecoins offering instant gains is heating up.
- Influencers and storytellers are playing an increasingly important role in the crypto industry, with projects requiring stronger emphasis on narrative, connection, and community engagement to thrive.
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