More than 100 crypto projects have closed, gone bankrupt, or disappeared in 2026, according to RootData. Ryan Kirkley, CEO of Global Settlement Network (GSN), dissects this wave of collapses as a delayed consequence of the aggressive fundraising era of 2020-2021.
During that era, many projects raised substantial capital without having any revenue or a realistic path to profitability. Announcing funding rounds could instantly boost token prices and attract retail investors - a misplaced incentive. For Kirkley, this sealed their unfortunate fate from the start. “If you raise at a valuation that is too high, you have already guaranteed a negative outcome for yourself,” he said.
The capital tightening trend is clearly recorded in the latest data. A Galaxy Research report shows that venture capital injected about $4 billion across 355 deals in the first quarter of 2026. That investment figure is down 50% from the fourth quarter of 2025. The disparity with the number of deals, which only fell by 16%, signals the disappearance of the mega-rounds that typically flooded the market.
Governance Hurdles and Cancelled Commitments
The burden on projects comes not only from the lack of fresh capital, but also from their network structures. The concept of decentralized governance presents complex issues in practice. Token holders have proven not to always be active participants in the ecosystem, hindering operations due to the lack of real participation.
On the funding side, agreements on paper are sometimes meaningless. GSN itself experienced firsthand when an investor failed to disburse signed funding commitments. This series of events highlights the fragile foundations of projects born purely out of euphoria.
Sectors with minimal utility are now facing the hardest hit. Kirkley highlighted social tokens, memecoins, and parts of the Web3 gaming sector as those facing a harder reckoning. The winners emerging from this phase are entities with clear utility: stablecoins, neobanks, and providers of wallet infrastructure and institutional-grade transaction settlement.
Bitcoin’s Critical Support and Potential Drop to $41,000
The internal conditions of projects are pressured by increasingly tight macro sentiment. Kirkley assesses that the market is currently in a soft bear market phase, with Bitcoin’s crucial defense level at $61,200.
If Bitcoin breaks below $61,200, Kirkley warns of the potential for cascading forced selling. This breakdown scenario opens room for Bitcoin to slide sharply toward the $41,000 level.
Yet behind the alarm of startup failures, nation-state adoption is still progressing. Over the past month, Kirkley has met with representatives from seven governments interested in blockchain technology. A selection phase is taking place: projects without fundamentals are eliminated, leaving room for those serious about building real infrastructure.
Reported from CoinDesk.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
