The crypto market is set to see explosive growth in the number of tokens, with predictions suggesting that by 2025, the number could exceed 100 million.
Currently, there are over 36 million crypto tokens, and the pace of new token creation is accelerating.
Analysts: Oversupply of Tokens Could Lead to Shorter Altcoin Seasons
In a post on X, Crypto analyst Conor highlighted this rapid increase. He noted that we are on track to hit 100 million tokens by the end of 2025.
“There are 36.4+ million crypto tokens today. We are on pace to have 100 million tokens by the end of 2025. To put in perspective, the 2017-2018 “alt season” had just <3000 tokens, and the 2013-2014 alt season had <500 tokens,” Conor noted.
However, this surge in token numbers has sparked concerns as well. Analyst Alex Kruger commented on the growing oversupply, pointing out that the demand for tokens hasn’t kept pace.
“Too many tokens. Infinite more to come. Supply of tokens is greater than demand,” Kruger explained.
This, according to Kruger, will likely lead to shorter, less frequent “altcoin seasons” during which many tokens see rapid growth. Altcoin seasons are basically periods when altcoins outperform Bitcoin. Kruger mentioned that altcoin seasons will still occur but will be brief, lasting only days or weeks at most.
Kruger advised investors to adjust their expectations and re-balance their portfolios. The growing number of tokens means that finding the right coins to invest in is becoming more difficult.
As Kruger compared, picking successful coins in this market is now as challenging as picking winning stocks, especially given that many stocks underperform against benchmarks like the S&P 500 or Nasdaq 100.
The large supply of tokens, with many having little value or utility, has left many investors with a sense of sentiment malaise, despite the rising overall market cap.
Jesse Eckel, another crypto expert, responded to Kruger. He emphasized that the majority of tokens today are either memecoins or low-effort projects with little long-term potential. Only a small fraction of these tokens have solid fundamentals or capable teams behind them.
“I’d argue that with more tokens, the need to be able to filter tokens via fundamentals grows significantly. Which in turn will cause a flow of capital toward those that are distinguished from the rest. Aka you still get altseason, but it’s focused on those that pass a certain threshold of minimum effort,” Eckel said.
Eckel argued that as more tokens flood the market, the need to filter becomes even more crucial. He suggested that altseason could still happen, but it would focus on tokens with real value and effort.
“So, more tokens does not stop an altseason from happening. It simply raises the bar for the tokens that are worthy of capital and attention during this season,” Eckel added.
Former Binance CEO CZ echoed these sentiments, advising investors to stick to fundamentals.
“A hot market may have many “opportunities” or “quick returns.” But it is best to stick with fundamentals,” CZ said in a tweet.
While the market may offer many opportunities in the short term, analysts suggest taking a long-term view and focusing on solid projects.
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