RootData: Have we reached the bottom of the bear market? Understand the cryptocurrency industry cycle through six charts

Author: Gu Yu, RootData

Recently, with projects like BitMEX and Bitmart announcing their shutdowns one after another, dead projects have once again become the focus of market discussions. Currently, RootData's compilation of the "2026 Crypto Dead Projects List" has included over 100 projects.

The large-scale elimination of low-quality projects and extreme pessimism in sentiment are often seen as signs of a market bottom in a bear market. At this point in time, where exactly does the crypto industry stand in its historical cycle? What are the indicators such as the number of new projects, the number of new tokens, and financing data?

Based on these questions, RootData has compiled exclusive multidimensional data from the platform and created five charts to better help everyone understand the current state of development in the crypto industry and its position within the entire historical cycle.

1. Number of New Projects

The number of new projects is one of the most important indicators for judging the activity of the crypto market, reflecting entrepreneurs' enthusiasm for the prospects and opportunities in the crypto market.

This chart is primarily based on the registration time statistics of over 20,000 projects recorded by RootData's X account, which can accurately represent the establishment and market entry of new projects, down to the month.

From this chart, it can be seen that the peak period for the number of newly established crypto projects was from September 2021 to January 2022, with more than 300 new projects each month, during which BTC price reached a historic high of $69,000. After that, the number of new projects has shown a continuous downward trend, with slight rebounds in March 2023, March 2024, and January 2025.

Since then, the number of new projects has plummeted, with the monthly count not exceeding 80 this year, approaching levels seen before August 2020. Interestingly, the current BTC price is on par with the price during the peak period for new project numbers at the end of 2021.

2. Project Financing Data

In recent years, financing in the crypto primary market has shown significant characteristics of peak decline and structural adjustment.

From 2021 to early 2022, the market was in an extremely active phase, with quarterly financing amounts repeatedly exceeding $10 billion, peaking at nearly $13 billion, and the number of financing events climbing to a historical peak of 592, with both the scale and frequency of capital inflow reaching a temporary high.

As the prices of mainstream cryptocurrencies fell and the market turned bearish, financing amounts dropped to near five-year lows in 2023 and continued to hover at that level. However, the number of financing events quickly surged in March 2024, attempting to capture potential opportunities through a "broad net" diversification investment strategy under limited funding, but this strategy ultimately proved difficult to avoid disappointing investment returns.

In the past year, the trends of financing quantity and financing amount have gradually diverged in opposite directions. Although the number of financing events has continued to decline in recent years, the financing amount has significantly increased since the end of 2024, mainly due to substantial financing from leading projects like Binance, Polymarket, and Dunamu.

Currently, the number of financing events in the crypto market has declined for three consecutive years, marking the longest downward cycle in the history of the crypto industry. Even the new highs in BTC prices in 2025 have not reversed this trend, reflecting that capital has shifted to a highly cautious allocation logic, accelerating concentration in leading tracks and projects with strong certainty and high barriers, rather than broadly betting on emerging projects, intensifying the Matthew effect in the market.

3. Number of Mergers and Acquisitions

In contrast to the significant contraction trend in the crypto investment and financing market, the number of mergers and acquisitions in the crypto industry remains at a historical high, experiencing a structural shift from sporadic exploration to full-scale explosion.

Between 2013 and 2020, the volume of mergers and acquisitions in the crypto industry remained in single digits for a long time, breaking 10 for the first time in 2021, reaching 11 in 2022, and then accelerating upward. The year 2025 became a landmark watershed: a total of 267 mergers and acquisitions were completed throughout the year, a year-on-year increase of over 50%.

Entering 2026, despite the bearish trend in spot prices in the crypto market, merger and acquisition activities have instead heated up against the trend. In the first half of the year, there were 75 transactions, totaling over $9 billion, a staggering 26-fold increase compared to the same period last year.

Typical cases include Mastercard's acquisition of payment infrastructure BVNK for $180 million, and Blockworks acquiring the data platform Messari at a price significantly below its previous valuation (over 90% discount), clearly indicating that low-price bottom-fishing and infrastructure positioning have become mainstream strategies.

At the same time, crypto giants like Coinbase, Kraken, and Moonpay hope to enhance their control over the upstream and downstream industry chains through mergers and acquisitions, filling gaps in core capability building; traditional internet and financial companies are accelerating their entry into the market, acquiring core capabilities through mergers and acquisitions to gain an advantageous position in the increasingly large crypto market.

Overall, crypto mergers and acquisitions are evolving from cyclical activities to a wave of institutional integration. As global regulatory frameworks gradually clarify, the future of the crypto industry may be dominated by a few giants holding licenses and infrastructure, with the integration process continuing to deepen.

4. Number of New Tokens

The number of new tokens is one of the most important indicators reflecting the activity of the crypto secondary market, with most project teams tending to issue tokens during periods of market recovery and positive trends, closely related to the popularity of new narratives.

Throughout the historical cycle, the number of new tokens experienced two small peaks in 2018 and 2021, but the real historical peak period began in March 2024, creating a historical record in January 2025 with 145 new tokens, which is far from the peak periods of other charts.

This is mainly related to the meme craze and AI agent narrative that have emerged since 2024. In January 2024, pump.fun launched on the Solana mainnet, significantly lowering the technical threshold for ordinary users to issue tokens. Around March 2024, the meme craze officially erupted, with tokens like BONK, WIF, and BOME frequently seeing hundredfold increases, leading to a market narrative of "attention equals value": anything that can attract attention can be tokenized.

By the end of 2024, projects like Truth Terminal and ai16z drove the AI agent narrative to popularity, with Virtuals Protocol enabling users to quickly create, tokenize, and trade AI agents, resulting in the creation of over 10,000 AI agent projects in recent years.

The foundation is the technological democratization of token launch platforms, the fuel is meme culture, and the AI agent craze serves as a powerful booster in the later stages. These factors collectively contributed to the number of new tokens in the crypto market reaching a new high in January 2025.

However, in this cycle, many tokens have very short lifecycles, with most tokens reaching zero in a short time, leading to severe dilution of market liquidity, and the traditional "altcoin season" has been delayed or fragmented.

5. Number of Primary Market Investors

According to RootData data, nearly 7,000 projects, VCs, or individuals have participated in primary market financing rounds, with the number of VCs being 2,617 and the number of individuals close to 3,000.

Although all are closely related to the state of the crypto primary market, unlike the trends of financing amounts and quantities, this chart has not significantly declined since 2021, but experienced a peak in April 2024, with the cumulative number of participating investors exceeding 900, setting a historical record.

This is mainly due to changes in the structure of investor themes. In 2021-2022, the main participants in the crypto financing market were VCs, with many second- and third-tier VCs heavily investing in altcoin projects, averaging over 20 investments per month. Similarly, many projects' financing rounds often featured 20-40 VC names to showcase their popularity.

However, in the bear market of 2022-2023, many VCs were eliminated from the market, and angel investors, primarily consisting of entrepreneurs and KOLs, began to become one of the most active subjects in the primary market. Many projects' financing PRs began to feature dozens of angel investors' names, with the highest record exceeding 100.

But as the number of financing events continues to decline and investor returns have been too poor, angel investors' presence is also starting to fade from the investor lists of most projects. This month, the list of investors with investment records has only about 100 names, creating a new low since July 2020.

6. Number of New Ecosystem Projects

New ecosystem projects from various Layer 1/2 have long been a major source of new projects in the crypto industry, with many Layer 1/2 hosting various hackathons, incubation programs, etc., to enhance their ecosystem activity.

For a long time, Ethereum and its Layer 2 solutions have dominated the number of new projects, claiming the top four spots in 2022. However, starting in 2024, Solana has become a primary destination for new projects amid its DeFi and meme waves. Meanwhile, Hyperliquid, Arc, and Robinhood Chain have become some of the few new Layer 1/2s to make the list in the past two years, further squeezing the market space of the Ethereum ecosystem.

In the first seven months of this year, the new ecosystem projects recorded by RootData across various Layer 1/2 have all shown significant declines. Currently, the top eight Layer 1/2s are Solana (59), Robinhood Chain (42), Ethereum (36), Base (30), Hyperliquid (19), BNB Chain, Arbitrum, Polygon, Arc, and Sui.