600,000 New Tokens In January: Analysts Worried

The crypto market experienced an unprecedented surge of new token issuances in January 2025, raising concerns about liquidity fragmentation and its impact on altcoins. According to recent data, over 600,000 new tokens were created during the month, twelve times more than in the same period in 2024.

An explosion of new tokens worries crypto analysts

In a recent post on X, the co-founder of CoinGecko reminded that until 2022-2023, about 50,000 new crypto tokens were created each month. However, starting from the fourth quarter of 2024, this figure exploded to 400,000 per month, with an all-time high of 600,000 in January 2025.

The rise of platforms like Pump.Fun that facilitate token creation has contributed to this proliferation. However, the dispersion of capital among so many assets leads to thinner liquidity and more volatile prices. The lack of liquidity directly impacts altcoins, many of which have not regained their peaks from 2021. This fragmentation of capital could delay the traditional “altcoin season,” a period when these cryptos experience spectacular rises.

A decisive turning point for the industry

In previous bull cycles, gains generated by Bitcoin flowed into Ethereum, before cascading into altcoins and memecoins. However, the massive entry of traditional financial institutions into the crypto ecosystem is disrupting these dynamics. Halm emphasizes that the involvement of these players will alter liquidity rotation and transform capital flows within the industry.

According to Ong, the multiplication of tokens prevents the “mega-pumps” of earlier cycles: “Too many tokens, and not enough attention and liquidity for each one,” he stated on X. If this trend continues, the crypto market could surpass one billion tokens within five years, profoundly redefining its financial landscape.

This explosion in the number of tokens poses a major challenge for liquidity and the dynamics of the crypto market. With the growing involvement of institutions and capital fragmentation, the ecosystem could undergo a lasting transformation, forcing investors and traders to adapt to a rapidly changing financial landscape.