New cryptocurrency issuance hit an all-time high in January, sparking concerns among analysts over the lack of investor liquidity in the market. Over 600,000 new cryptocurrencies were launched during January, a 12-fold increase compared to the same period in 2024, according to GeckoTerminal data shared by Bobby Ong, the co-founder and chief operating officer of CoinGecko. “Back in 2022-2023, around 50k new tokens were minted every month,” Ong wrote in a Feb. 14 X post, “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!” he added.
Platforms like Pump.Fun, which simplify token creation, have contributed to this surge, Ong said. The growing token issuance also reflects the “natural exuberance of a bullish crypto market,” according to Gabriel Halm, research analyst at the crypto intelligence platform IntoTheBlock. “As a result, today’s diverse array of tokens spreads liquidity and investor attention thinly, leading to more disjointed price action,” he told Cointelegraph. Reflecting the thin liquidity in the crypto markets, more established altcoins also lack the momentum to recover to their 2021 highs. However, analysts predict a delayed altcoin season due to the token dispersion created by the growing number of cryptocurrencies.
TradFi institutions are altering crypto liquidity rotations. During previous crypto bull markets, profits stemming from Bitcoin’s (BTC) rally would flow into Ether (ETH) before finding its way into altcoins and more speculative memecoins.
However, growing institutional participation is changing the liquidity flow dynamics in the market, according to Halm: “Alongside the near exponential growth of new crypto assets, the emergence of traditional finance institutions as an actor in the space will inevitably alter the liquidity rotations seen in previous cycles, reforming how capital flows in the crypto space.”
CoinGecko’s Ong also pointed to liquidity fragmentation as the issue causing the lack of momentum in the crypto market. “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,” Ong said in a subsequent X post. At the current pace, the crypto industry could surpass one billion tokens within the next five years, he added.