Why Are There So Many Cryptocurrencies, and Do We Actually Need Them All?
Tens of thousands of cryptocurrencies exist. Here's what's genuinely driven that number so high, and an honest look at how many of them serve a real, distinct purpose.
By Firoz Khan|1 August 2026|Updated 20 September 2026|7 min read
Tens of thousands of cryptocurrencies exist today, a genuinely striking number for what's still, relative to traditional finance, a young industry. Understanding why the number is so large, and being honest about how many of them actually serve a distinct purpose, are two separate and equally useful questions.
The low technical barrier to creating one
Launching a new token, particularly on an established chain using a standard like Ethereum's ERC-20, requires deploying a fairly simple smart contract, a task achievable by a single competent developer in a matter of hours. That low barrier is the single biggest driver of sheer volume, creating a coin is dramatically easier than building an entire company or product from scratch.
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The legitimate reasons a genuinely new coin gets created
A new consensus mechanism or technical trade-off worth testing independently, a specific application needing its own token for its particular incentive structure, or a community or regional need not well served by existing options are the recurring, legitimate reasons behind projects that go on to build a real, lasting purpose.
The far more common reason, stated plainly
Pure speculation, a large share of tokens launched are created specifically to capture short-term trading interest, riding whatever narrative or meme happens to be trending, with founding teams retaining a meaningful share of supply and little to no genuine long-term product development behind the launch.
A useful filter for deciding what's actually worth understanding
Ask what specific problem this coin solves that an existing, more established option doesn't already solve, and whether its usage or adoption data supports that claim independently of its price chart. Most of the tens of thousands in existence won't pass that test, and that's a genuinely normal, expected outcome of how easy the barrier to creating one has become, not a flaw unique to crypto that needs explaining away.
A reminder
The FCA risk warning still applies to higher-risk crypto content. Always assess how much risk you are willing to take before buying.
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