A senior solicitor and business crime specialist has warned that cryptocurrencies may face a struggle to regain credibility after a new report found that over 800 have 'died' in the last 18 months.

There has been a recent explosion in initial coin offerings (ICOs), a process by which a start-up issues a new coin to raise funding, with companies raising $3.8 billion in 2017.

That figure has already soared to $11.9 billion in 2018 so far.

But Dead Coins, a website which tracks abandoned projects and crypto scams, has identified over 800 digital currencies that are now 'dead' or considered worthless from the last 18 months.

→ READ MORE: Bitcoin could drop to $100, leading economists warn

Neil Williams, senior associate solicitor at Rahman Ravelli, says this is largely due to cryptocurrency's unreliability factor.

"Many were set up with the simple intention of making fraudulent gains," he said. "Fake start-ups have been known to see the initial hard sell swiftly followed by those behind an ICO disappearing with investors' money. Others were created but the company's product never became a reality. And even those that have been regarded as the "major players" have struggled.

"Bitcoin, the biggest cryptocurrency, has seen its value fall by about 70% since 2017’s record high of $20,000. It is certainly still in existence and still has its enthusiastic following. But the fact that even Bitcoin has suffered a major battering to its reputation and its value shows that cryptocurrency has a credibility problem. "

Williams warns that the more cryptocurrency's credibility is eroded, the less chance that projects - both the legitimate and fraudulent ones - may have of attracting and retaining investment.

"Cryptocurrencies may, therefore, face a struggle to regain credibility – and see that reflected in rising values," he said.

"Cryptocurrencies, as originally devised, are by their nature a friend of the fraudster. They have no tangible product, they allow anonymity and the lack of regulation historically has made them a virtual haven for those who want to conduct their dealings away from the authorities’ prying eyes.  

→ READ MORE: New study finds half of ICOs fail within first four months

"An awareness of this may be behind the sudden attack of cold feet among many who were so keen to invest not so long ago. But conversely, we may still be some way off the logical outcome."

However, Williams stressed that an increase of mainstream investment in cryptocurrencies will lead to closer official scrutiny and regulation – which could help to drive out people who are looking to make fraudulent gains.

This may also lead to a more stable market being created for honest investors, he says.

"We may, therefore, see another swing upwards in cryptocurrencies’ fortunes, as they become increasingly marketable and viewed as safer and more legitimate than at present," said Williams.

"This is something that could only be hastened if and when regulation is introduced. It would be unwise, therefore, to announce the demise of cryptocurrencies."