More than 100 encryption projects will close down in 2026, and Internet-style reshuffle will hit the

More than 100 encryption projects have closed down in 2026: an Internet bubble-like reshuffle

In 2026, more than 100 encryption projects have closed down, filed for bankruptcy or been permanently suspended. This round of Internet bubble-like reshuffle is eliminating the weakest builders in the industry, while the core infrastructure remains strong.

This data comes from RootData, one of the most widespread waves of closures recorded in a single year in the industry. This statistic covers projects that have ceased operations, entered bankruptcy proceedings, or were actually abandoned.

The tide of crypto project closures in 2026: More than 100

Reports pointed out that the number of crypto projects that have closed down in 2026 has exceeded 100. Its scale makes this trend systematic rather than an individual phenomenon. In a week in late July alone, four major companies reportedly announced closures or filed for bankruptcy, involving derivatives exchanges, trading platforms, Movement Labs and Storj Labs. These projects span multiple crypto domains, from centralized exchanges and derivatives to infrastructure and decentralized storage, demonstrating that the shuffle is not limited to speculative memecoin or NFT experiments, but spans DeFi, gaming and core infrastructure.

Project closure does not mean temporary silence. The statistics capture closure notices, depletion of funds, delisting and teams stopping development, rather than temporary inactivity that may reverse after the market recovers.

This breadth is significant for the overall market because it marks an integration rather than an isolated event. As the wave of closures intensifies, Bitcoin is trading at about US$65,005, while the Fear and Greed Index on August 9, 2026 is 31, which is in the fear range.

What drove this dot-like reshuffle?

The core pressure is cash flow. Many projects that relied on token issuance rather than sustainable income had their funding chain broken after speculative capital fell and altcoin prices fell 70% to 90% from cyclical highs. Industry insiders compare this situation to the investment products that are flooded with meme coins, highlighting that the previous cycle relied heavily on narrative rather than practical application.

Security losses have further exacerbated financial pressures. There were 207 crypto hacking attacks recorded in the first half of 2026, the highest number in any six-month period on record. Total losses in the first half of the year amounted to US$972 million, with activities related to state actions dominating: approximately US$643 million (approximately 66%) were attributed to North Korea-related actors, a burden that an underfunded team could not bear.

From a business fundamentals perspective, the similarities to the Internet bubble are that excessive financing and weak revenue models allow projects to be quickly exposed after cheap capital disappears, while a more stringent environment allows companies that rely on hype rather than practical applications to emerge.

The policy context makes 2026 different from the collapse cycle of 2022. On March 17, 2026, the U.S. Securities and Exchange Commission issued an explanation clarifying how federal securities laws apply to certain crypto assets and transactions. The explanation provides token classifications and clarifies how airdrops, protocol mining, protocol pledge and encapsulation of non-securities crypto assets are handled. This clearer regulatory framework has prompted surviving projects to move towards clear business models, and even recent initiatives, such as cancelled corporate treasury plans, have shown how quickly weak arrangements are now disintegrating. Such shuffling removes noise while strengthening surviving ecosystems.

What types of encryption projects are most likely to survive the 2026 reshuffle?

Survivors often share common characteristics: active users, clear practicality, cash flow, and sustained developer motivation. These signals distinguish persistent networks from short-term experiments that rely on token issuance to maintain operations.

The industry's response to this is to view it as integration rather than contagion. One observer who tracks the field believes that visible closures underestimate actual losses: "For every crypto project you hear of shutting down, there are probably ten others silently doing the same thing. Maybe this is creative destruction for the next cycle."

Market preferences are shifting to transparent execution and measurable adoption, distinguishing projects based on narrative dynamics from projects with defensible use scenarios. Regulatory pressure has added another layer of filtering, as recent enforcement actions, such as the expansion of U.S. crypto sanctions, have raised compliance thresholds for exchanges and infrastructure companies.

For readers who are concerned about integration trends in the second half of 2026, what needs to be concerned about is cash flow, vulnerability exposure risks, and whether the project can meet the SEC's clear classification standards without reorganization. These waves of closures are more a sign that the industry is maturing under stricter capital and safety disciplines, rather than shrinking.