Over 100 Crypto Projects Shut Down or Bankrupt by 2026
As of 2026, over 100 crypto projects have shut down, filed for bankruptcy, or permanently ceased operations, with the pace of exits accelerating.
In just one week in late July, BitMEX, BitMart, Movement Labs, and Storj Labs announced closures or submitted applications; this includes trading platforms, wallets, DeFi, NFTs, and L1. The Polkadot parachain Moonbeam permanently stopped operations on July 31, with unbridged assets being stranded.
Capital is flowing to a few revenue-generating projects, while teams lacking product-market fit are exiting under event-driven pressures. Hyperliquid and Pump.fun are benefiting, while most token-subsidized operators are under pressure.
Source: Public Information
ABAB AI Insight
This round of clearing resembles the restructuring after the internet bubble; Ethereum's general-purpose L2 rapidly expanded in 2023 but became crowded and lacked differentiation due to lowered deployment thresholds. Espresso Systems notes a focus on integrating general-purpose L2s.
ARK Invest's research shows that capital is becoming more selective, with teams and platforms lacking actual product-market fit shutting down. Hyperliquid and Pump.fun now account for 67% of total revenue in the application layer; most projects rely on their own tokens to cover costs, with altcoins dropping 70%-90%, leading to reserve failures.
In line with historical cycles of project elimination, we are currently transitioning from quantity expansion to revenue concentration, with security incidents (resulting in $1.1 billion in losses in the first half of the year) further accelerating exits.
Essentially, this is a concentration of capital: revenue and funds are gathering towards a few protocols with real demand, as the token subsidy model is unsustainable in a bear market, allowing applications that generate actual costs to survive.
ABAB News · Law of Cognition
- Projects with usage but no revenue will eventually shut down.
- Token subsidies cannot withstand a bear market.
- Only projects with cash flow remain during the consolidation phase.