(Bloomberg) -- Digital-asset enthusiasts suggesting that the market rally since the start of the year brings an end to “crypto winter” may want to first make a wider assessment before declaring a thaw. 

Much like the tradition celebrated on Feb. 2 of announcing whether a groundhog sees its shadow when emerging from its burrow to proclaim an early spring, many crypto advocates are pointing to the roughly 40% gains since December as end to the turmoil over the past year that erased as much as $2 trillion in hypothetical market value. 

A closer look shows that a slew of high-profile projects are still going bust. tZero Crypto announced Friday that it will be ceasing operations on March 6. In the past two weeks, the algorithmic stablecoin Neutrino announced it will be relaunched as an index token, while a lending marketplace on the Solana blockchain named Everlend said its shutting down because of a lack of liquidity. A fund that tracked blockchain-related companies and an NFT index is also folding. 

“Badly designed projects without economic fundamentals are failing,” said Aaron Brown, a crypto investor who writes for Bloomberg Opinion. “Most of these projects only made sense when investors were contributing funds indiscriminately to crypto, hoping for quick profits.”

“I don’t think there’s much substance to this crypto rally,” said Henry Elder, head of decentralized finance at Wave Financial. “Every risk asset is simply in thrall to central bank expectations. So weaker crypto firms and projects will likely continue dying off.”

The shutdowns come after the prolonged bear market of last year, when Bitcoin dropped by more than 60%, and thousands of coins and projects turned into zombies, barely used or traded. This year’s closures are a tail end of that — and yet another proof that many projects have failed not just because of the so-called crypto winter, but because they may have been simply bad products.

“It looks more like a decision that they hadn’t reached product market fit and in today‘s environment it would be doubly hard to attain that,” Sidney Powell, chief executive officer of Maple Finance, a decentralized lending marketplace for institutions, said about Everlend. While the crypto-lending market remains chilled, Maple is trying to rev up business by delving into loans on real-world assets, like trade receivables, Powell said.

Many analysts point out that the majority of newly launched project in all industries — from restaurants to shops — fail, either because they were launched at the wrong time, or weren’t good enough. 

“This is not a crypto issue – it a start up issue,” said Campbell Harvey, a finance professor at Duke University. “This happens all the time in business.”

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