The crypto market has experienced considerable swings, with periods of stability and fluctuations. FTX’s issues in 2022 impacted the market negatively. This year, major cryptocurrencies have seen some improvement with stabilized macro conditions, despite higher inflation and other headwinds. However, not all crypto assets are created equal. Some provide real-world utility, and others are far more speculative in nature. This article highlights three extremely risky cryptos to avoid.
Shiba Inu (SHIB-USD)
The first cryptocurrency to avoid in the new year is the 2021 sensation, Shiba Inu (SHIB-USD). It surged an astounding 121,000,000% in 2021 but saw significant retracement last year, dropping more than 90% from its peak. The trend may continue into 2023.
Shiba Inu’s major problem lies in its lack of competitive edge or uniqueness. It’s essentially a basic ERC-20 coin on the Ethereum (ETH-USD) blockchain, serving as just another payment option. Unfortunately, it’s not widely used.
Shiba Inu faces challenges as key growth drivers faltered in 2022. The anticipated Shibarium blockchain test didn’t happen, and dwindling interest in non-fungible tokens (NFTs) affects its gaming and metaverse goals. Payment coins often see steep retracements after rapid gains, suggesting SHIB may fall further.
Dogecoin (DOGE-USD)
Elon Musk’s support drove Dogecoin (DOGE-USD) up over 20,000% in 2021, but it’s still just a payment coin with limited utility. Although transaction costs have improved, daily transactions remain around 20,000, hardly changing over eight years.
Like Shiba Inu, Dogecoin is just a payment coin without competitive advantages, making it indistinguishable from many other blockchain payment projects. Daily transactions remain around 20,000, unchanged since late 2014, despite reduced transaction fees.
For context, Visa processes up to 24,000 transactions per second, whereas Dogecoin handles the same number in a day. Merchant adoption of Dogecoin has stagnated. Like Shiba Inu, Dogecoin may face substantial declines after significant gains, especially without clear catalysts for 2023.
Pepe Coin (PEPE-USD)
The Pepe Coin’s (PEPE-USD) plunge showcases how the crypto market can be as dramatic as any action movie. While Pepe’s fate remains uncertain, Shiba Inu emerges as a more stable and reliable meme coin. Pepe burst into the market, rocketing 7,000% in 17 days, but it’s now stalling. The founders misused their power, swiping 16 trillion tokens (about $15 million), exposing security flaws, and causing the coin to plummet almost 40% in two weeks.
The memecoin has resurged thanks to social media buzz, particularly on X (formerly Twitter). A whale’s $1 million investment secured 807 billion PEPE tokens, boosting its value. Yet, another major holder’s sale of 2.26 trillion tokens worth $2.5 million caused a 3.48% drop on the same day, showcasing the impact of whales on market volatility and short-term trading risks.
Pepe Coin launched as an ERC-20 token with 420.69 billion in total supply. Most (93.1%) went to liquidity, and 6.9% to a multi-signature wallet for future use. The developers stress it holds no intrinsic value and shouldn’t be seen as an investment.
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.
