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 11 October 2026|3 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.
How many are there, really?
The answer depends on who is counting. CoinGecko, which applies listing criteria, has been reported as tracking roughly 18,000 to 20,000 cryptocurrencies in 2026. CoinMarketCap, which also counts tokens found by crawling decentralised exchanges, reports more than 55 million. Neither number tells you how many are worth your attention. Being listed on a tracker is not an endorsement.
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.
Coins and tokens are not the same thing
A coin generally has its own blockchain, such as Bitcoin or Ether. A token is created on top of an existing blockchain by a smart contract. That is why one developer can launch a token in an afternoon, and why many of the tens of thousands of entries on a tracker are tokens rather than separate networks.
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.
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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.
Checks that matter in the UK
Before buying a coin you have just heard of, check who is promoting it. UK crypto promotions should carry a clear risk warning and must not offer incentives to invest, such as refer-a-friend bonuses. The FCA keeps a Warning List of unauthorised firms and says that a firm missing from it may still be a scam. It also says crypto is largely unregulated in the UK, that you will generally not be covered by the Financial Services Compensation Scheme, and that you should be prepared to lose all the money you put in.
Many coins also means many records. For Capital Gains Tax, HMRC treats each type of token as its own pool with its own pooled cost. Say you hold six different tokens. That is six pools and six sets of purchase records, and swapping one for another is a disposal of the one you give up.
Questions to ask before you spend time on a coin
- What problem does it solve that something established does not already solve?
- Who runs it, and are they identifiable?
- How is the supply set, and who holds the largest share?
- Where can it be bought and sold, and how much trades each day?
- Does anyone use it for something other than trading it?
Where to read more
- What is a cryptocurrency?: the starting point
- Digital assets explained: the wider category crypto sits inside
- Memecoins explained: the part of the market driven by sentiment
- Crypto whales explained: why ownership concentration matters
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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