About a week ago, I wrote about cryptos to consider as Bitcoin (BTC-USD) passed the $30,000 mark again. Bitcoin ETFs catalyzed the resurgent prices and suggested that greater crypto utility will continue to grow the sector. That’s good overall if you’re like me and believe that traditional finance needs to be challenged.
But at the same time, Bitcoin’s rising prices are pulling up the entire sector, junk included. That presents a dangerous situation whereby investors buy into junk coins knowing that they often produce outsized gains on positive-trending crypto prices. But that leads to regrets as those quick, outsized gains become outsized losses. Bitcoin isn’t junk; that’s very clear. And all junk is not Bitcoin, either.
Pepe (PEPE)
Pepe (PEPE-USD) is the most obvious embodiment of those dangers I just referred to. It’s junk but junk that has appeal for a lot of reasons. The primary reason is that meme coin investors understand how rapidly it can appreciate. That volatility goes both ways, of course.
Pepe is the flavor of the week. It’s a meme coin based on the somewhat popular Boy’s Club comic strip. The cartoon frog leads in the comic found fame as an icon in several movements, from the Hong Kong protests to the Alt-right movement.
Meme coin creators pounced on that opportunity, and PEPE-USD was born. Investors won’t find anything in terms of real-world utility here. It’s all about meme culture and hard-to-understand factors related to that niche. In short, not much that’s real or relevant in the world of investing. It’s also a bit of an affront to crypto projects that focus on fintech utility and integration into the real world. If for nothing else, that’s a reason to avoid Pepe.
ApeCoin (APE)
ApeCoin (APE-USD) is one of the most blatant scams enacted out of the largesse characterizing the stimulus era. The project revolves around the Bored Ape Yacht Club NFTs, creative marketing, and capitalizing on fools with more money than brains.
That may be blunt, but it’s fairly accurate. ApeCoin is a token fueled by the Bored Ape Yacht Club and its unexpected popularity at one time. People spent amazing amounts of money on NFTs, which still sell for amazingly high prices today, into the millions in some cases. If you aren’t a prince but instead a lowly pauper, perhaps you’ll be interested in an entry-level Bored Ape, which can be yours for a mere $70,000. What a joke the entire project is, and I can’t think of a better example of the greater fool theory of economics.
Part of me feels really bad for individuals who spent perhaps their life’s savings on a Bored Ape. The other part realizes they invested in one of the craziest ideas ever and are difficult to pity.
Shiba Inu (SHIB)
Shiba Inu (SHIB-USD) is yet another meme coin. No utility, flashy cuteness, and a lot of dashed dreams are what all meme coins have in common.
You probably know the story behind Shiba Inu: It was born out of the hype surrounding Dogecoin (DOGE-USD) with aspirations to kill Dogecoin. But it’s basically just another mechanism for crypto speculation and nothing more. A whole host of dog-inspired meme coins followed Shiba Inu, each with similarly dumb storylines.
I think that by now, everyone knows that meme coins are nothing except a popularity contest. So instead of marketing with corny copy like “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,” consider wowing the audience with a truly engaging story. No one believes Shiba Inu to have some ridiculous imagined utility. Maybe that would drive more investment. I know I’d be more inclined to consider a meme coin for that reason.
On the date of publication, Alex Sirois 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.
