The crypto market is off to a hot start this 2025 as it records an increase in new token creation in January, Bobby Ong, co-founder of CoinGecko, has disclosed.
According to Ong, over 600,000 new tokens were minted by chains, reflecting a 12x increase from the 50k monthly tokens minted from 2022 to 2023.
Before reaching a record in January, the spike in token minting began in the fourth quarter of 2024, with up to 400k coins. Ong clarified that the rise in new coins is partially due to the popularity of user-friendly platforms, but cautioned that this is not good news for the cryptocurrency industry.
2/ Back in 2022-2023, around 50k new tokens were minted every month.
Fast forward to Q4 2024, and we’re seeing 400k new tokens/month – with January 2025 hitting a record 600k new tokens created per month! 🤯
That’s 12x growth in just over a year. pic.twitter.com/KZkG4hmEJd
— Bobby Ong (@bobbyong) February 14, 2025
Popularity Of User-Friendly Token Platforms Supported Release Of New Tokens
According to Ong, this surge in new tokens is powered by the popularity of user-friendly token platforms like Pump.fun that operates on the Solana blockchain.
Pump.fun is a favored destination for meme coin developers due to its rapid and user-friendly token minting process. With the ability to mint tokens without the need for technical expertise, this website attracts a diverse user base. SunPump, a competitor of Pump.fun, enables users to generate coins rapidly, but it operates on the Tron blockchain.
In a post, Ong shared the “ease and convenience” of minting tokens. He said almost anything can be tokenized, from memes to attention-based assets. In addition to easy-to-use minting platforms, the growing number of blockchain networks and decentralized exchanges (DEXs) boost token production.
There are an average of five to ten new chains introduced each month, with 17 new chains reaching a peak in May 2024, according to recent statistics. In March 2024, 89 new DEXs were tracked.
More Tokens, More Problems For Crypto, (Some) Experts Say
Although the surge in new tokens creates a vibrant and competitive crypto market, it also brings a few problems.
Gabriel Halm of IntoTheBlock is one of the few analysts who raised alarms over the sudden increase in new tokens. Halm shared that this massive volume of new tokes may lead to “liquidity fragmentation”. Since the attention of holders and investors is spread out, capital is spread thinly on different assets.
In this scenario, the liquidity of some assets may diminish, triggering more price volatility. Some investors and traders may face challenges completing large trades without a substantial price impact.
You said it well. Too many tokens, each spreading the limited attention and liquidity of traders even thinner. That’s why we don’t see the great alt pumps of previous cycles
— Bobby Ong (@bobbyong) February 14, 2025
Surge In New Tokens Prevents New Alt Pumps From Happening: Ong
Ong also shared his thoughts on “liquidity fragmentation,” saying that too many tokens in the market will thin liquidity.
He further explained that the current liquidity fragmentation is the primary reason the market isn’t benefiting from exciting alt pumps common in previous cycles.
According to CoinGecko, if the trend continues, the market can expect around 1 billion tokens within five years.
Featured image from Gemini Imagen, chart from TradingView
