Zombie-Like Crypto Assets Haunt Cryptocurrency Industry, Forbes Report Warns

Forbes has identified 50 blockchains with valuations exceeding $1 billion, including XRP and Ethereum Classic, but many of these tokens have limited utility beyond speculation and questionable viability, earning them the label "crypto zombies." Forbes categorizes these blockchains into two groups: spin-offs, such as Bitcoin Cash and Ethereum Classic, which emerge from disagreements among programmers, and direct competitors to established networks like Bitcoin and Ethereum, such as Tezos, Algorand, and Cardano.

Cryptocurrency's "Zombie" Blockchains: A Critical Analysis of Overvalued Crypto Assets

In a comprehensive report published by Forbes, a concerning trend has emerged within the cryptocurrency industry: the presence of "crypto billion-dollar zombies." These cryptocurrencies and associated blockchain projects exhibit substantial market valuations yet suffer from limited practical utility beyond speculative trading.

Ripple and XRP: A Prominent "Crypto Zombie"

One of the most notable crypto zombies identified by Forbes is Ripple Labs' XRP. Despite its robust trading volume of approximately $2 billion per day, Forbes asserts that XRP's primary use remains speculative in nature, with a lack of significant real-world applications.

Ethereum Classic: A Functional Zombie with Questionable Viability

Ethereum Classic (ETC), the original Ethereum chain, is another prominent example of a "crypto zombie." While ETC boasts a market value of $4.6 billion, itsfee generation in 2023 was a mere $41,000, raising concerns about its long-term viability.

Additional "Crypto Zombie" Projects

Forbes' report also highlights other notable crypto projects classified as "crypto zombies." These include Tezos (XTZ), which raised $230 million through an initial coin offering (ICO) in 2017 but has since struggled to generate significant fee earnings; Algorand (ALGO), despite its ambitious claims as an "Ethereum killer," has only earned $63,000 in blockchain transaction fees throughout 2023.

Two Categories of Crypto Zombies

Forbes categorizes these "zombie" blockchains into two primary groups:

Spin-offs: These blockchains emerged from disagreements among programmers regarding the governance and direction of established blockchains like Bitcoin and Ethereum. Examples include Bitcoin Cash (BCH), Litecoin (LTC), Monero (XMR), Bitcoin SV (BSV), and Ethereum Classic.

Direct Competitors: These blockchains aim to rival established platforms like Bitcoin and Ethereum, offering alternative features or enhanced capabilities. However, despite their market valuations, their actual usage and adoption remain limited.

Overvaluation and Lack of Utility

The report highlights a growing disconnect between the market valuations of certain cryptocurrency projects and their actual usage and utility. This disparity has led Forbes to label these projects as "zombies," raising concerns about the long-term sustainability of the cryptocurrency industry.

Conclusion

Forbes' report on "crypto billion-dollar zombies" serves as a cautionary tale for investors and industry participants alike. It emphasizes the importance of evaluating cryptocurrency projects based on their fundamental value and usage rather than relying solely on speculative hype and market valuations. As the cryptocurrency industry matures, it is likely that these "zombie" projects will face increasing scrutiny and downward pressure on their valuations, highlighting the need for transparency and accountability in the digital asset space.