As Bitcoin (BTC-USD) ascends, it’s been pulling the broader market upwards in its wake, but not all in this sector are sturdy like BTC. Many doomed cryptos are riding on the coattails of this growth, creating a hazardous environment for investors. These underwhelming coins generate exaggerated returns on the back of positive crypto market trends, pushing investors into risky bets.
While many investors shy away from shorting meme cryptos due to the likelihood of sudden spikes, diversification across various overvalued projects without leverage can effectively mitigate this risk. Still, as excitement builds and the prices of cryptocurrencies rise in tandem with BTC, it’s vital to remember that not all cryptos are created equal. Navigating crypto market trends requires a keen understanding of these risks. With that said, let’s look at three doomed cryptos to steer clear of at this time.
Bitcoin Gold (BTG)
Despite its grand aspirations to become a digital refuge in the volatile financial markets, Bitcoin Gold (BTG-USD) has stumbled and then some. It has been incredibly tough for BTG-USD since its 2017 birth via a Bitcoin hard fork, marked by more than a 95% drop in value. Therefore, Bitcoin Gold has, unfortunately, found itself more fool’s gold than the precious element.
It appears investors are likely to nestle their resources into tangible gold, particularly when economic storms are brewing. Cryptocurrency, with its signature unpredictability, is often a tightrope walk than a safety net. Therefore, it’s tough for investors to wager on BTG, with their issues compounded by multiple network breaches. Hence, sticking to the original rather than wagering on BTG is best.
Shiba Inu (SHIB)
With its roots firmly planted in humor, without much real-world utility, the cartoon canine Shiba has managed to reel in audacious investors. It’s among the original meme tokens touted as a potential Doge-slayer, stirring the pot in a high-stakes crypto-casino. However, when the applause dies down, it’s clear that Shiba Inu (SHIB-USD) is nothing more than a high-roller in the risky roulette of cryptocurrencies.
Shiba Inu’s prospects are remarkably bleak, offering little upside ahead for its investors. Its highly anticipated Shibarium update, SHIB’s potential game-changer, has been plagued by several postponements and skepticism around its efficiency. Consequently, SHIB-USD has shed a ton of value and continues to be one of the most volatile cryptos. Hence, much like its meme coin siblings, the token encapsulates a tale of grand aspirations dashed rather than a triumphant victory lap.
Axie Infinity (AXS)
Axie Infinity (AXS-USD) was once a dazzling player in the crypto sphere but now finds itself shrouded in an aura of doubt like most altcoins. Indeed, the pendulum might now be swinging towards a strategic retreat if you’re clutching onto AXS tokens. A lot has to do with how the interest in play-to-earn (P2E) dapps may have plateaued, and given last year’s hack on its parent chain, an Axie revival seems unlikely at this point.
The cyber heist last year on Axie’s progenitor blockchain bore a chilling $615 million loss, casting a long shadow over the Axie environment. Moreover, the event triggered a noticeable decline in active addresses on its platform. As if this weren’t enough, the SEC’s potential categorization of AXS has further weighed down the security. Amidst unresolved U.S. court outcomes and looming regulatory specters, the future liquidity and demand for AXS look unappealing.
On the date of publication, Muslim Farooque did not hold (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.
