Is market liquidity a concern?

The cryptocurrency market has increased in the new creation of tokens throughout January, according to the coinagecko co-founder, Bobby NGO.

According to NGO, 600,000 new tokens were struck. This represents an increase of twelve times compared to the 50,000 monthly tokens created from 2022 to 2023.

The acceleration of the creation of tokens began in the fourth quarter of 2024; The monthly figures reached 400,000 before going to the record level of January.

NGO attributes this growth to several factors, in particular the rise in power of tokens incubator platforms like Pump.Fun, a startup that works on Solana and allows users to create memes parts without requiring technical expertise.

Sunpump, a rival, which operates on a tron.

“If he can be tokenized, he will be tokenized,” noted NGO, pointing to the immediate tokenization of memes and assets based on attention.

Blockchain networks and decentralized exchanges (DEX) are also increasing quickly. The data shows about five to 10 new channels that start monthly, with a peak of 17 new channels in May 2024. In addition, 89 new DEXs were followed in March 2024 only.

‘Too many tokens …’

Market analysts warn that this proliferation could lead to a fragmentation of liquidity. Responding to concerns about the impact of the market, NGO has recognized the potential drawbacks: “Too many tokens, each spreading the limited attention and liquidity of even thinner traders. This is why we do not see the great alt pumps from previous cycles. »»

At the current growth rate, Coingecko projects the total number of tokens could reach A billion in five years.

This growth raises questions about the sustainability of the market and the capacity of the cryptocurrency ecosystem to support such diversity while maintaining healthy trading volumes and a price discovery.

The trend shows the global changes in the structure of the cryptocurrency market, where lowered technical obstacles and automated creation tools have democratized the program.

This could potentially affect the cost of market efficiency and concentrated liquidity that defined previous market cycles.

The dangers of overabundance

The increasingly crowded cryptographic landscape is starting to raise concerns. While Pump.fun and Sunpump facilitated the launch of tokens, the flow that followed by coins increases the risk of market dilution and scams.

Investors spread their funds through an overwhelming number of assets, liquidity is fragmented and attention is moving away from more legitimate projects.

Currently, tokens without real use gain ground thanks to a media threw, rather than a substance, which leads to the value of erosion. Criticism blame President Donald Trump for trying to capitalize on this trend with the launch of his meme piece, official Trump (Trump), a few days before his oath.

This trend has also paved the way to Shoot—The fraudulent schemes where the creators abandon a project after collecting funds.

The injured investors recently filed a complaint against the viral star Haliey Welch (alias Hawk Tuah Girl) after his hawk medal crashed. These investors accused It promotes unregistered security.

Another 2024 incident involved rapper Curtis James Jackson III (alias 50 Cent), who said That his website and his X account have been compromised to announce a false cryptocurrency piece called “Gunit”. The hackers used its large fans base to inflate the value of the token before it crashed at $ 0,00016.

The boom of the same often attracts speculative traders, focused on short -term profits rather than long -term development. This speculation leads to unsustainable pumps and subsequent accidents, which erode the confidence of investors. And with too many parts to follow, investors are more and more inclined to fall for poorly built patterns.

Blockchain networks also feel tension. In particular, Solana was confronted with significant congestion of the network during its memelite currency explosion, with increased transaction costs and slower speeds with an impact on global user experience.

As coins flood the market, the risk of regulatory control increases. An increased concern about scams and fraud could trigger a repression of governments, which would only make compliance more difficult for legitimate projects.