- Crypto startups struggle, with 45% failing and low income reported.
- Venture capital failure rates: Polychain 44%, Yzi Labs 72%.
- Smaller projects face higher 33% failure rates.
A recent study by Chainplay and Storible indicates that nearly 45% of venture capital-backed crypto projects suspended operations between January 2023 and December 2024.
This trend highlights significant challenges within the crypto ecosystem, impacting market dynamics and venture capital strategies.
Crypto Projects Face 45% Failure Rate Globally
The detailed study by Chainplay and Storible reveals troubling trends in the crypto venture capital domain. Nearly 45% of crypto projects funded within the specified timeline have ceased operations. Among venture capital firms, Polychain Capital and Yzi Labs (formerly Binance Labs) have faced high failure rates, with many projects not achieving significant financial benefits.
Changes within funding scales highlight increased risks, particularly for smaller ventures. Projects funded with less than $5 million exhibit a 33% failure rate. Conversely, those raising over $50 million show stronger viability, underlining the importance of significant initial capital. As noted by an analyst in the Chainplay study:
Ultimately, having prominent backers still significantly improves a project’s chance of survival and success due to increased resources, credibility, and networking advantages. However, as demonstrated, VC or angel backing does not guarantee a project’s ultimate success. Investors should be mindful of the inherent risks and maintain realistic expectations when evaluating crypto ventures.
Historical Context, Price Data, and Expert Analysis
Did you know? Historically, well-funded projects outperform their smaller counterparts. Projects raising over $50 million boast significantly lower failure rates compared to those garnering less than $5 million.
Ethereum (ETH) currently trades at $2,647.69, with a market cap of $319.64 billion and a trading volume decrease of 23.39% within 24 hours, per CoinMarketCap. Recent price changes highlight a significant 44.91% increase over 30 days. Available supply is 120,722,947.78 ETH as of June 4, 2025.
Notable figures such as former Coinbase CTO Balaji Srinivasan and Arthur Hayes have not publicly addressed these findings directly.
Source: https://coincu.com/341540-crypto-startups-failure-rate-study/