Number of cryptocurrencies reach 20,000 setting a new record amid volatile markets
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The crypto market has lost its value by over 50% in 2022, but the number of emerging digital currencies continues to grow to hit a new record high.
As of June 26, the number of cryptocurrencies tracked by CoinMarketCap surpassed the 20,000 mark for the first time in history to stand at 20,002. Notably, by leveraging a web archive tool, Finbold has determined that in 2022, the market has added 3,765 new cryptocurrencies, a growth of 23%.
Interestingly, despite the emergence of new tokens, Bitcoin still dominates the market with the flagship cryptocurrency’s market cap accounting for 42%.
It can be perceived that the new tokens joining the market are hoping to benefit from any possible rally that might arise from the current correction.
Market likely to rally
Despite the market having lost its capitalisation by over $2 trillion, most analysts have maintained the sector will rally while noting that the current environment is part of maturity.
Overall, the market has experienced sell-offs for the entire of 2022 amid glimpses of making slight recoveries. On June 25, Finbold reported that the market regained about 16% of its market cap, attracting over $100 billion in capital inflow.
It’s worth noting that the survival of the 20,000 tokens will mostly depend on the specific crypto’s utility. There is a consensus that some digital assets will drop off as the crypto market matures.
The emergence of new assets is also accelerating the regulation debate as authorities aim to protect investors. In this line, the founder of Cardano (ADA), Charles Hoskinson, recommended self-certification to regulate the growing market.
According to Hoskinson, authorities should adopt a similar model used by the U.S. Internal Revenue Service (IRS) in managing cryptocurrencies.
Impact of lack of regulations
Additionally, the current lack of regulation is among the critical drivers for the emergence of cryptocurrencies. For instance, launching cryptocurrencies into the market does not require a lengthy regulatory process similar to listing stocks.
Although some of the assets aim to emulate established cryptocurrencies like Bitcoin, new entrants are sometimes driven by fraudulent motives seeking to take advantage of scattered regulations. Notably, the market has been hit with several high-profile crypto scams, with the recent Terra (LUNA) crash standing out.