In January, the launch of over 600,000 new cryptocurrencies raised alarms about the potential impact on market liquidity.
This surge in new token creation reached an unprecedented level in January, according to data from GeckoTerminal, as shared by Bobby Ong, co-founder and COO of CoinGecko. Compared to January 2024, the number of new tokens launched grew by a staggering 12 times.
Ong pointed out that in 2022-2023, the monthly token issuance was around 50,000, while in Q4 2024, that number increased to 400,000 per month. By January 2025, it hit an all-time high of 600,000.
Platforms like Pump.Fun, which streamline the process of creating tokens, have been instrumental in this rapid rise.
Gabriel Halm, a research analyst at IntoTheBlock, suggested that this influx of tokens reflects the natural excitement in a growing crypto market. However, it also leads to thinner liquidity, making price movements more erratic and spreading investor attention across a wider variety of tokens.
As liquidity becomes more fragmented, even well-established altcoins are struggling to regain the highs seen in 2021. Analysts are forecasting a delayed altcoin season, driven by the dispersion of tokens.
Traditional finance (TradFi) institutions are reshaping liquidity flow dynamics in crypto markets. Halm highlighted that these institutions, alongside the influx of new tokens, are changing how capital flows, shifting away from the Bitcoin-to-Ether-to-altcoin pattern seen in past bull runs.
Ong further emphasized that liquidity fragmentation is causing the current market stagnation. With so many tokens diluting investor attention, it’s no surprise that the large altcoin rallies of previous cycles aren’t materializing. He added that, at the current rate, the crypto market could surpass one billion tokens in just five years.
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