Crypto’s easy-money era is ending in a wave of failures

The crypto industry is undergoing a dramatic shift, marked by a wave of project shutdowns and bankruptcies, according to Ryan Kirkley, CEO of Global Settlement Network. Over 100 crypto projects have either ceased operations or gone bankrupt in 2026, as falling altcoin prices, depleted token treasuries, and limited venture funding reveal businesses without sustainable revenue models.

This wave of failures was largely a consequence of the industry's funding practices during the 2020-21 fundraising boom. Venture investors deployed around $4 billion across 355 crypto and blockchain deals in the first quarter of 2026, roughly half the capital invested in the fourth quarter of 2025. However, the number of deals fell by only 16%, suggesting that the decline was primarily due to fewer large financing rounds rather than a decrease in overall interest.

Kirkley argues that many projects raised excessive amounts of capital at inflated valuations, often without generating significant revenue or a clear path to profitability. This led to a situation where these companies were dependent on achieving multibillion-dollar valuations simply to justify further financing. The crypto fundraising culture, driven by the positive impact of large funding announcements on token prices and retail interest, created an incentive to present financing in a more optimistic light, sometimes obscuring the actual firmness of the commitments.

Another factor contributing to the current challenges is the limited effectiveness of decentralized governance. Token ownership does not always translate into active participation in the ecosystem, and governance votes can hinder the ability of struggling protocols to pivot quickly. As a result, the market is increasingly determining the viability of different crypto projects.

Despite the downturn, Kirkley identifies stablecoins, neobanks, and institutional-grade wallet and settlement infrastructure as potential winners of this shakeout. However, sectors such as social tokens, memecoins, and parts of the Web3 gaming industry may face a more severe reckoning. The market's current state has been described as a "soft bear market," with critical support levels at $61,200 for Bitcoin.

A breach of this level could trigger further selling among leveraged players, potentially driving the price down to $41,000. While the overall market sentiment is negative, Kirkley remains optimistic about the long-term adoption of blockchain technology. Over the past month, he has engaged with representatives from seven governments interested in leveraging blockchain for various applications, such as lowering costs and modernizing financial systems.

However, the adoption is taking a different form than initially envisioned, with governments and institutions showing more interest in regulated infrastructure rather than decentralized solutions. This shift may ultimately result in a more pragmatic approach to the adoption of blockchain technology.