Risky Business: 3 Speculative Meme Tokens to Approach With Caution
Speculative meme tokens are unlikely to yield positive surprises. If taking risks, investors are better likely to find deals in other speculative areas of the market, such as penny stocks. Indeed, there are a few companies to be snuffed out with solid business fundamentals and a decently-skewed risk/reward profile. However, most meme tokens in the crypto realm remain highly-volatile. And while many may have performed well during this recent rally, there’s reason for concern.
A deep correction doesn’t denote undervalued status for fundamentally weak crypto projects. Those that provide little utility represent investments that are more akin to gambling than what most investors would traditionally view as true buy-and-hold assets. Accordingly, for those with some preference for capital preservation, here are three tokens I’d suggest avoiding for now.
Shiba Inu (SHIB-USD)
Some investors find the cryptocurrency market appealing despite its volatility. Picking a winner early can result in astronomical returns, as seen with Shiba Inu (SHIB-USD). In 2021, it propelled by the meme stock craze. However, the token has since plummeted.
Shiba Inu, designed for functionality beyond Dogecoin, operates on Ethereum (ETH-USD) providing compatibility with various decentralized applications (dApps). Recently, Shibarium, a scaling solution, aimed to enhance transaction efficiency. However, Shiba Inu’s progress, especially compared to Ethereum, remains limited. Its survival depends on creating valuable use cases and adoption, raising questions about its necessity and current optimism.
Shiba Inu’s drawbacks outweigh reasons to invest. A cryptocurrency’s long-term viability rests on real-world use cases. And Shiba Inu lacks a clear competitive edge among numerous alternatives, raising doubts about its necessity. Ethereum, Cardano, and Solana offer more promising functionality for smart contracts, with a higher developer focus, increasing their potential success.
Dogecoin (DOGE-USD)
Dogecoin (DOGE-USD) faces post-correction volatility, sparking concerns about investment viability despite new exchange listings. Popular for its unique branding and affordability, DOGE’s recent 6% gain and 9% surge indicate a 7.5-cent valuation. An RSI of 71.1 signals overbought conditions, with 7.5 cents as a crucial support/resistance line.
Altcoins, including Dogecoin, gain attention as Bitcoin (BTC-USD) and Ethereum strengthen. However, caution is advised. While Bitcoin rises due to potential spot-traded ETFs, altcoins like Dogecoin may pose risks. Investors should distinguish the reasons behind Bitcoin and Ethereum’s rise and approach altcoins cautiously, considering their qualitative differences.
TipRanks suggests a mostly neutral sentiment, advising caution due to potential upside indicators. But low large transactions and net network growth hint at subdued activity compared to historical norms. Investors may consider a wait-and-see approach.
Internet Computer (ICP)
Internet Computer (ICP-USD), once hyped for its high-speed blockchain, faced a downfall despite backing from top crypto firms like Andreessen Horowitz. Launched at $400 in May 2021, the token plummeted over 80% by July. This happened amid accusations of secret transactions and profit-centric decisions. Despite attempts to revive through NFTs and tokenized Bitcoin swaps, results remained underwhelming.
Initially, the Internet Computer protocol excited the crypto community. Yet, by Mar. 30, it plummeted to $5.03 from its peak of $750.73 in May 2021—a staggering 99% drop. Despite this, ICP quietly progressed in the decentralized, scalable, and interoperable smart contract platform space. As such, the progress is inconsistent and slow.
Moreover, ICP experienced rapid and erratic price swings, rendering it highly volatile and prone to fluctuations. Despite technological advancements, it resembles other altcoins. Uncertainty shrouds its decentralization and permissionless transactions. The future of ICP and its network hinges on possibilities, not certainties.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
