Crypto’s Survival of the Fittest Weeds Out Weak Projects
Since September 2025, the crypto industry has witnessed a wave of closures, with over 100 projects shutting down, including prominent names like BitMex, Balancer, Everclear, and ZeroLend. The sector has seen bankruptcies and shutdowns across exchanges, DeFi protocols, wallets, NFT marketplaces, and blockchains. Of the 118 token generation events (TGE) in 2025, 100 failed to meet their valuation targets, with the median token down 71% from its launch value. Over 53% of all tokens launched since 2021 are now inactive, with 7.7 million failing in the fourth quarter of 2025 alone.
The industry is undergoing a harsh but necessary Darwinian phase, where hype is being separated from genuine utility. For years, crypto projects thrived on attracting capital and transaction volume, leading to an oversaturation of similar products. As retail capital exits and the bear market persists, the focus has shifted to how projects can differentiate themselves. Institutional participation demands products that improve trading costs, provide liquidity, enhance capital efficiency, or reduce operational complexity.
Many failing projects, despite significant transaction volumes or capital raised, lacked sustainable revenue models. For instance, Everclear reached $500 million in monthly volume before shutting down, and Tally facilitated $1 billion in payments but couldn't build a financially viable business. In contrast, Hyperliquid has surged in growth by offering a product users are willing to pay for, demonstrating the importance of tangible value.
The current consolidation phase is seen as a healthy development, as financial markets reward infrastructure that removes friction. The industry's early years rewarded experimentation, but now the criteria for survival have evolved with institutional interest. The survivors will be those that demonstrate measurable utility, such as execution, liquidity, capital efficiency, and lower friction. This process, though painful, is necessary for the industry to mature and gain credibility.