Do you remember the bull market of 2021?
That year, Bitcoin broke through $60,000, Ethereum hit a record high, NFT avatars sold for millions of dollars, and the metaverse concept made everyone believe we were on the eve of an internet revolution. The cryptocurrency industry experienced an unprecedented financing frenzy. Venture capital institutions rushed in, afraid of missing the next hundred-fold project. In that era of狂热, it seemed that any project labeled "Web3" could easily raise tens of millions of dollars.
According to Venture Capital analysis, crypto technology startups raised $25.2 billion in financing that year, a staggering 713% increase from $3.1 billion in 2020. However, four years later, when we look back at the top 400+ highly financed projects, only a very few still stand tall.
Most projects have disappeared. They either announced cessation of operations, pivoted to other projects, never recovered after being hacked, were severely negatively impacted by the collapse of FTX, or became dormant zombie projects.
Note: This table includes 67 representative cases of projects that have shut down, gone to zero, or have low operational activity, selected from the top 400 projects by funding amount in 2021, with a total financing exceeding $5 billion. Funding amount statistics are limited to the year 2021 only and do not include funding rounds from 2020 and prior or 2022 and beyond. Projects whose current market value is marked in red indicate that their current market capitalization is lower than their total 2021 financing amount.
The most devastating disasters occurred in the centralized finance (CeFi) platform sector. FTX, once seen as Binance's biggest competitor after raising $1.32 billion, collapsed spectacularly in November 2022, with its founder SBF sentenced to 25 years in prison for fraud. Almost simultaneously, Celsius Network, a crypto lending platform that raised $750 million promising users an 18% annual return on deposits, imploded. Its token CEL fell from $8 to $0.02, a 99.73% drop. Names like BlockFi, Voyager Digital, Babel Finance, and Prime Trust, which once represented the "formalization" and "institutionalization" of crypto finance, collectively raised over $500 million but fell like dominoes during the 2022 liquidity crisis.
If the collapse of centralized platforms was due to fraudulent business models, then the collective demise of NFT and metaverse projects was more like the dissipation of a mass hallucination.
In 2021, everyone was talking about virtual land, digital art, and Play-to-Earn games. Axie Infinity, with its "play-to-earn" concept, raised $159.5 million. Its token AXS once surged to $164.9, and pet NFTs in the game were even speculated to hundreds of thousands of dollars each. In developing countries like the Philippines, countless people quit their jobs to "farm" gold full-time in Axie, seeing it as an opportunity to change their destiny. However, when the game's economic model collapsed, AXS plummeted 99.49% to $0.85. Those players who invested their life savings ultimately discovered it was merely a Ponzi scheme requiring a constant influx of new players.
The Sandbox, a representative metaverse project, raised $93 million. Its virtual land NFTs were sold out in 2021, and the SAND token surged to $8.4. But three years later, this so-called metaverse is empty, with sparsely attended occasional events. Although the official Twitter account still posts updates, the comment section is long deserted. Even more ironic are the NFT platforms focused on music and art, most of which have become zombie projects.
Projecting the lessons of 2021 onto today reveals some harsh truths. Most projects are products of the cycle; truly enduring value-creating projects will not exceed 5%, and this 5% is usually only identifiable at the lowest trough of the bear market. The wheel of history rolls forward. As 2025 is about to end, a new cycle is about to begin. When the new tide recedes, how many of today's projects will be caught without their swim trunks?
