2,600+ New Cryptocurrencies were Created in First Half of 2021
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2,600+ New Cryptocurrencies were Created in First Half of 2021

What factors drove the development of so many new coins and tokens within this unusual period for crypto?
Neither the author, Kai Morris, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

The popular crypto asset database, CoinMarketCap, has listed 2,655 new cryptocurrencies in H1 2021. This is notable sign of growth for the industry shows just how much interest and innovation there is within the crypto market. Let’s examine some of the reasons for this growth. 

Bull Markets and Digital Asset Adoption in Early 2021

The most obvious reason for this growth is the roaring bull market that early 2021 has seen. The industry market cap jumped from $776 billion to an all-time high of $2.56 trillion in May. This is a 229.89% increase in just five months. 

Image of industry market cap from January to August 2021 – image courtesy of CoinMarketCap

This bull market has been most noticeable with Bitcoin, reaching an all-time high of $64,863.10. It is tough to pinpoint what exactly triggered it, but interest in Bitcoin may correlate to times of economic hardship, such as how Bitcoin was created one year after the 2008 economic crisis. 

Regardless of its origin, Elon Musk certainly added fuel to it– at least until he didn’t. At the start of the year, Elon Musk tweeted Tesla’s support of Bitcoin, revealing people can directly buy his cars with it, subsequently shooting the price upwards. However, that ended abruptly when he turned his back on Bitcoin over concerns of energy usage in May, triggering a sharp drop and a plateau.

But this was not the end of Bitcoin’s adoption. In June, BTC was elevated to legal tender status by El Salvador, triggering a wave of political discussion throughout Latin America. For the first time, Bitcoin was truly being treated as an alternative to fiat, and having the backing of an entire country helped others take it more seriously. The sheer exposure Bitcoin was getting marked an important moment for crypto, and very likely encouraged developers to release their own coins and tokens and jump on the bandwagon. 

Let’s not forget within this year, Etheruem saw remarkable growth, too. In late June, there were 200k more daily active ETH addresses than BTC. This is a sign of the DeFi market’s expansion, as Ethereum is the clear leader of that industry. Some of this increase in users (and price) is also due to the (eventual) release of Ethereum 2.0, which will switch the blockchain to Proof-of-Stake and add deflationary protocols.

2021’s Rise of Meme Coins Explained

The 2021 bull run cannot truly be discussed without looking into the explosion of “meme coins”. It all started with Elon Musk’s consistent endorsement of Dogecoin, helping it reach an all-time high of $0.73 back in May. These endorsements inspired a slew of copycat-style coins to be developed, all aiming to essentially “out-meme” DOGE and pump as high as possible in as little time as possible. 

Visit CoinMarketCap’s “recently added” tab on any given day and you will spot listings for meme coins, most being thematically similar to Dogecoin itself. In the last five days, at least five Doge copycats have been added to the site: Dogereversed, Baby Shiba Rocket, Baby Doge Billionaire, DogemonGo, and Pup Doge. It goes without saying the vast majority of these coins lack fundamentals, solid dev teams, and any unique selling points. 

During this time, one DOGE alternative did manage to gain notoriety: Shiba Inu. After airdropping Vitalik Buterin $1 billion worth of SHIB as a means of gaining publicity, the Ethereum founder subsequently donated a significant portion to India’s COVID relief. This, too, encouraged more people to make coins and tokens mimicking SHIB.

For better or worse, meme coins have become an important part of the crypto landscape. Elon Musk’s feverish support and guerilla marketing from others have meant the industry is rampant with these projects. It will be intriguing to see how they fare as the rest of the industry continues to develop and mature.

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Is there room for meme coins in the future of the crypto industry? Let us know in the comments below.