The reasons behind the high market caps of ‘Zombie Blockchains’ – Insights from Unchained

In the world of cryptocurrency, there is a growing trend of “zombie blockchains” – projects that have been abandoned by their developers but still have a surprisingly high market capitalization. These projects often have little to no development activity, no community support, and no real-world use cases. So why do these zombie blockchains continue to have such high market caps?

According to insights from Unchained, a leading blockchain research firm, there are several reasons behind the high market caps of zombie blockchains. One of the main reasons is speculation. Many investors are drawn to these projects because they see them as potential “hidden gems” that could one day come back to life and deliver massive returns. This speculative mindset can drive up the price of these tokens, even in the absence of any real value or utility.

Another reason for the high market caps of zombie blockchains is the lack of liquidity. In many cases, these projects have a limited supply of tokens available for trading, which can create artificial scarcity and drive up prices. Additionally, some investors may hold onto their tokens in the hopes that the project will eventually be revived, further reducing the available supply and pushing up prices.

Furthermore, the lack of regulation in the cryptocurrency market can also contribute to the high market caps of zombie blockchains. Without clear guidelines and oversight, investors may be more willing to take risks on projects that have been abandoned or are no longer actively maintained. This lack of regulation can create a breeding ground for speculation and manipulation, further inflating the market caps of these projects.

Overall, the high market caps of zombie blockchains can be attributed to a combination of speculation, scarcity, and regulatory uncertainty. While some investors may see potential in these projects, it is important to approach them with caution and conduct thorough research before investing. As the cryptocurrency market continues to evolve, it will be interesting to see how these zombie blockchains fare in the long run.

• Source Link: https://zephyrnet.com/why-many-zombie-blockchains-still-have-market-caps-in-the-billions-of-dollars-unchained/