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Cryptocurrency analyst Alex Krueger says most tokens fail on purpose, arguing that outdated regulation pushes projects to launch assets without their enforceable rights..
His comments coincide with a period of high token failure rates in the cryptocurrency market. Since 2021, more than 13.4 million tokens have died.
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Why so many altcoins fail in today’s market
Second For research CoinGecko, 53.2% of all cryptocurrencies listed on GeckoTerminal have failed by the end of 2025. 11.6 million tokens have collapsed In 2025, accounting for 86.3% of all registered failures by 2021, indicating an unprecedented acceleration.
The number of listed cryptocurrency projects rose from approximately 428,000 in 2021 to 20.2 million by 2025. This growth was met with a peak of failures: only 2,584 dead coins in 2021, rising to 213,075 in 2022, 245,075 million, and 245,1023 million in 2022, and 245,023 million. 2024. However, The collapse of 2025 He was much bigger than all of them Previous years.
He saw some areas Higher failure rates. Music and video codecs fail at a rate of about 75%. Cryptocurrency analyst Kroger argued that outdated regulations and token structures are fueling the crisis.
“Most tokens created are inherently worthless due to outdated regulations,” books.
In a detailed post, Krueger argued that the SEC’s use of the Howey Test and law enforcement-led oversight has pushed… Cryptocurrency projects in a corner in the situation. For context, US regulators use the Howey test to determine whether a transaction qualifies as an “investment contract” and therefore a security under federal securities law.
The transaction is considered A security, if included: :
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- financial investment,
- In a joint project,
- With the expectation of profit,
- Building on the efforts of others.
If all four of these conditions are met, the securities laws of the United States apply. And to avoid Classified as securities The financial teams (Securities) have systematically withdrawn all rights from the tokens. The result, he said, was an asset class defined by speculation rather than ownership.
This design choice had far-reaching consequences. When token holders have no contractual rights, they also have no legal right to print. At the same time, the founders do not face any fiduciary obligations enforced on the people who finance their companies.
In effect, this created an accountability vacuum. Teams could hire big bucks or abandon projects altogether, often without facing legal or financial consequences.
“In any other market, a project that does not offer rights and complete darkness in the treasury would not have raised a penny. In cryptocurrencies, this was the only compatible way to launch. The result is a token contract designed to scale with a soft layer,” he added.
Frustrated with VC-backed utility tokens, Individual traders have turned to meme currencies That presented a clear lack of interest. As Krueger said, this trend has increased speculation and intense market behavior.
“This has worsened the situation: meme currencies are more speculative and less transparent, accelerating the shift towards predatory PVP trading and zero-sum gaming,” he commented.
Kruger thought That is the solution It is a new generation of codes governed by a stronger regulatory framework.
