There are now more than 10,800 different crypto coins. That exceeds the number of U.S.-listed stocks as well as the number of traditional U.S. mutual funds.
That total comes after would-be crypto entrepreneurs listed more than 2,600 new crypto assets in the first six months of 2021, a number that was reported Monday by crypto news site CoinDesk based on data from CoinMarketCap.
With everyone from influencers to sports stars suddenly trading Bitcoin and teenage millionaires being minted overnight, it's no mystery why programmers are rushing to roll out new coins. Earlier this year Dogecoin, which started as a joke in 2013, reached a value of more than $50 billion.
At the same time, the ballooning number of coins should give anyone who hopes to get rich off cryptocurrency pause. What are the chances of picking the next ride to moon, when there are 10,000 possibilities to choose from?
In contrast to crypto assets, the Wilshire 5000, a stock market index designed to include all stocks listed on major U.S. exchanges like the NYSE and Nasdaq, includes only about 3,500 names according Investor's Business Daily. That number has been shrinking in recent years, as the tech-driven U.S. economy has tended to favor larger corporations and many smaller companies prefer to seek private funding.
(There is still far more money invested in the U.S. stock market than cryptocurrencies, about $46 trillion vs. $1.9 trillion.)
There are about 7,600 traditional mutual funds, according the Investment Company Institute, a trade group. It may come as a surprise that that number of mutual funds exceeds the number of stocks, since most mutual funds aim to invest in U.S. stocks.
As it happens, like crypto, mutual funds went through a similar explosion in interest a generation ago during the 1990s stock market bubble.
The number of mutual funds roughly doubled to more than 7,000 during that decade. It was the heyday of the star portfolio manager, when stock pickers like Bill Miller who seemed to have the golden touch became household names among baby boomers eager to get rich.
Of course, betting on even the riskiest stock mutual fund seems positively staid by cryptocurrency standards. In the 1990s, doubling your money in a year was considered a killing. Earlier this year, one meme coin did that in a few minutes after a tweet by Tesla CEO Elon Musk. (It quickly fell back down.)
For their part, boomer investors eventually discovered that picking winning stocks was harder than it looked, and the amount of dollars held by U.S. stocks funds has been shrinking since 2006.
Will crypto see a similar shakeout? It may already be happening, according to Coindesk. The website reported that between 2014 and 2021 as many as 16,000 crypto assets appeared, though many — even a most — turned out to be scams and others failed to attract any assets.
The upshot: When it comes to crypto, apply the same rules you would to any other investment. If it sounds too good to be true, it probably is.