Predicting the Risk of Death for Cryptocurrencies Using Deep Learning
Doğa Elif Konuk, Halil Altay Güvenir · Journal of risk and financial management · 2025
The rapid rise in the popularity of cryptocurrencies has drawn increasing attention from investors, entrepreneurs, and the public in recent years. However, this rapid growth comes with risk: many coins fail early and become what are known as “dead coins”, defined by a lack of recorded activity for more than a year. This study applies deep learning techniques to estimate the short-term risk of a cryptocurrency’s death. Specifically, three Recurrent Neural Network architectures, Long Short-Term Memory (LSTM), Bidirectional LSTM (BiLSTM), and Gated Recurrent Unit (GRU), were trained on 18-month time series of daily closing prices and trading volumes using a stratified five-fold cross-validation framework. The models’ predictive performances were compared across input windows ranging from 10 to 180 days. Using the previous 180 days of data as input, GRU achieved the highest point accuracy of 0.7134, whereas BiLSTM exhibited the best performance when evaluated across input sequence lengths varying from 10 to 180 days, reaching an average accuracy of 0.676. These findings show the ability of recurrent architectures to anticipate short-term failure risks in cryptocurrency markets. Theoretically, the study contributes to financial risk modeling by extending time series classification methods to cryptocurrency failure prediction. Practically, it provides investors and analysts with a data-driven early-warning tool to manage portfolio risk and reduce potential losses.