When the benchmark cryptocurrency Bitcoin (CCC:BTC-USD) stumbled below $30,000 last week, many investors feared the worst. Certainly, the circumstances don’t bode well for cryptos in the near term. However, the volatility seems to have woken up the bulls. BTC traded around $33,000 heading into last weekend and is now priced at $38,000. Is this a new rally for the crypto market?
To be completely up front, nobody truly knows what’s going to happen with digital assets. At the same time, it’s important to put the recent rise in BTC and other cryptos in context. The bears likely smell blood in the water, so I wouldn’t let the big percentage move distract you from the wider narrative.
Many, if not most cryptos face outsized risks if Bitcoin’s current rally is another head fake. Based on 24-hour volume data from July 13, the top three digital assets — Tether (CCC:USDT-USD), Bitcoin and Ethereum (CCC:ETH-USD) — hold the vast majority of the market share.
Based on this data, when you combine the volumes of the number four asset all the way down to number 100, the tally is $31.3 billion. It’s a sizable amount, don’t get me wrong. But Bitcoin and Ethereum saw a combined $40.8 billion in volume over the same time period.
In other words, the viability of cryptos comes down to simple math. There are too many blockchain-based assets for investors to choose from. It’s more than likely that only a few digital coins and tokens will survive in the long run.
This article isn’t about hating on certain cryptos. By now, you should understand the digital market is extremely volatile and speculative. Rather, treat this list as a springboard to do further research. That being said, here are seven cryptos that stakeholders should consider selling or trimming into strength:
- Dogecoin (CCC:DOGE-USD)
- Shiba Inu (CCC:SHIB-USD)
- TRON (CCC:TRX-USD)
- BitTorrent (CCC:BTT-USD)
- Civic (CCC:CVC-USD)
- 0x (CCC:ZRX-USD)
- OMG Network (CCC:OMG-USD)
Don’t let my ownership of some of these cryptos trip you up. In most cases, I got in early and sold off core positions and am now playing with house money. Your circumstances may vary.
Cryptos: Dogecoin (DOGE)
Easily one of the most popular cryptos out there, Dogecoin has become a true phenomenon. It started as a parody of the speculative fervor in digital assets, but now I suppose DOGE is the biggest irony on the blockchain.
Of course, I can’t imagine that Dogecoin would be so popular if it didn’t generate wild profitability for its adherents. Yes, I understand that Elon Musk of Tesla (NASDAQ:TSLA) fame has been pushing DOGE every chance he gets. But in my opinion, the biggest sway for the joke crypto comes from everyday stories of the asset minting millionaires.
I’m all about giving credit where it’s due, and the mass enthusiasm for Dogecoin is not something you can ignore. But at the same time, DOGE was ranked 14 in terms of 24-hour volume on the aforementioned Statista report.
Granted, that’s a very high number for what has been a dumpster crypto. Nevertheless, ashes to ashes, dust to dust. Based on the recent underperformance of meme stocks, I’m very skeptical about DOGE.
Shiba Inu (SHIB)
If I’m skeptical about Dogecoin, then I’m extremely cynical about Shiba Inu — a meme trade if there ever was one. It’s hard for me to imagine why anybody would want to risk any significant capital for SHIB. For instance, here’s the utterly dubious explanation of the token found on CoinMarketCap:
“Once upon a time, there was a very special dog. That dog was a shiba inu, and this dog inspired millions of people around the world to invest money into tokens with the dog’s image on it.
According to the SHIBA INU website, SHIB is the “DOGECOIN KILLER” and will be listed on their own ShibaSwap, a decentralized exchange.”
Okay, then. If that wasn’t convincing enough, the founders of Shiba Inu stated the following: “We started from zero, with zero.” Also, “The brilliant minds behind Shib had never collaborated before.” Finally, “We love Shiba Inu Dogs.”
To be fair, I understand why someone would throw a few bucks at SHIB. Currently, you can get nearly 800,000 SHIB tokens for five dollars.
Psychologically, it’s an attractive pull. Personally, I think it’s bull-SHIB.
Cryptos: TRON (TRX)
TRON is a popular but polarizing altcoin. That’s primarily due to the crypto’s founder, Justin Sun. According to CoinMarketCap’s blurb about him, Sun is quite an overachiever. “Educated at Peking University and the University of Pennsylvania, he was recognized by Forbes Asia in its 30 Under 30 series for entrepreneurs.”
The technology entrepreneur even won a power lunch with none other than the Oracle of Omaha, Warren Buffett. However, that meeting never materialized, according to Observer.com. Instead, some eyebrows were raised:
“His resume appeared plausible at first sight, but questions over Sun’s legitimacy emerged this week after he abruptly canceled the lunch with Buffett, putting himself in the spotlight once again, while a bombshell report from Chinese media accused him of illegal fundraising, money laundering and sex trafficking, among other crimes.”
Now, I don’t want to get into a character framing argument. The viability of TRX is separate from Sun’s personal circumstances. However, I don’t think you can completely ignore his public challenges when considering TRON.
Remember, crypto-related projects like BitConnect were once all the rage until they were found fraudulent.
Naturally, if we’re going to talk about Justin Sun and TRON, we can’t ignore BitTorrent. A popular peer-to-peer (P2P) file-sharing and torrent platform, BitTorrent got off to a rocky start in the early days of the internet. Following the legally induced implosion of music-sharing platform Napster, P2P services like BitTorrent filled the void.
But like all things technology, the platform lost some relevance with the advent of mobile connectivity devices and on-demand streaming services. Seeing an opportunity for a pivot to cryptos and related endeavors, TRON bought BitTorrent.
Initially, BitTorrent found success through DLive, a video streaming platform that provided an alternative to YouTube. However, this seemingly bullish narrative unraveled quickly. Hate commentators and extremist ideologues used DLive to monetize what mainstream platforms like YouTube deemed unacceptable content.
After the platform was used to livestream the Jan. 6 incident at the U.S. Capitol, DLive found itself under Congressional scrutiny. It updated its rules to combat extremism and avoid the spotlight. However, the effectiveness of DLive’s policies is questionable.
Certainly, I think there are better tokens and cryptos to gamble on.
Cryptos: Civic (CVC)
I bought Civic purely based on chart-reading speculation and it performed quite well for me. At the time of my purchase, I thought its price action implied future upward mobility and I was proven correct. My only regret is that I definitely left profits on the table because I dumped my holdings too soon.
After I bought the altcoin, I took time to understand the fundamentals of Civic’s protocol. According to CoinMarketCap, “Civic is a blockchain-based identity management solution that gives individuals and businesses the tools they need to control and protect personal identity information.”
Moreover, the website adds that, “The platform is designed to change the way we think about identity verification by giving users more control over their personal data, while allowing them to access a wide range of services without needing to fork over excessive amounts of personal information.”
In this context, Civic offers incredible relevance as e-commerce grows in popularity. That said, as one of the less popular cryptos — CVC ranks 162 in terms of market capitalization — you may want to consider selling this token into strength.
Another speculative crypto I bought on a whim, 0x was one of the first ultra-risky altcoins listed on the Coinbase (NASDAQ:COIN) exchange. Since Coinbase allows relatively easy access to digital assets, ZRX likely enjoyed more popularity than it deserved when I purchased it in 2018.
While it was a near-term winner upon acquisition, 0x quickly fell afterwards and my holdings lost about 80% of their value. At that point, I simply forgot about ZRX and hoped I could get out of it one day.
Well, that day came earlier this year when ZRX made its way above the $1 mark. As with many other speculative cryptos in my portfolio, I sold out of 0x way too soon. Nevertheless, at its current price of 72 cents, I’m not complaining. I would have found myself a double-digit loser again if I had HODLed, or held on for dear life.
This reminds me of another important lesson: never assume that rising prices justify HODLing. As my misadventure with ZRX proved, things can always sour quickly.
Cryptos: OMG Network (OMG)
As I’m writing this, OMG Network is just below the top 100 list of cryptos based on market cap. Formerly known as OmiseGo, the platform offers technical substance.
According to CoinMarketCap, OMG is “a non-custodial, layer-2 scaling solution built for the Ethereum blockchain. As an Ethereum scaling solution, OMG Network is designed to allow users to transfer ETH and ERC20 tokens significantly faster and cheaper than when transacting directly on the Ethereum network.”
Primarily, OMG achieves its incredible efficiency through its MoreViable Plasma innovation. The scaling solution “uses a sidechain architecture to group several transactions off-chain into a batch, which can then be verified as a single transaction on the Ethereum root chain.” It’s a novel solution, but will anybody care?
I’m not trying to disrespect the platform. But I think investors — particularly those new to cryptos — should separate the technical architecture and applications from the coin or token itself.
In reality, plenty of blockchain projects claim incredible speed, efficiency and use cases. But unless enough people care to put their money into the platform, it’s just not going to take off. I’d be very cautious here.
On the date of publication, Josh Enomoto held a LONG position in BTC, ETH, and DOGE. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.