In 2023, the cryptocurrency market has seen quite a rebound. The aggregate value of all digital currencies has surged more than 37% year-to-date at the time of wiring. However, this impressive performance may mask the weakness of certain digital assets, which are still down considerably from their peaks and may have more downside ahead, making them the top cryptos to sell.
Bitcoin (BTC-USD) and Ethereum (ETH-USD) continue to dominate most discussions. Indeed, much of this year’s rally can be attributed to the strength of these top two tokens.
However, with volatility likely to remain high and an increasingly fragmented market with thousands of options for investors, these three meme tokens aren’t worth the risk right now.
Here’s why I remain fervently bearish on these three cryptocurrencies right now.
Shiba Inu (SHIB-USD)
Shiba Inu’s (SHIB-USD) burn rate is now positive, with nearly 95 million SHIB burning daily (according to recent data). Given the excessive circulating supply of tokens, the Shiba Inu community views this burn rate as largely necessary. Like all assets, supply and demand come into play at a certain point, and even though 410 trillion SHIB have been burned, around 590 trillion tokens remain in the ecosystem.
Now, that’s quite the supply decrease, and one might argue that, despite Shiba Inu’s nebulous fundamentals, if there’s less of a given thing, it should be worth more relative to its aggregate value. That hasn’t been the case this year, with SHIB losing value, representing significant underperformance relative to the overall market.
Investors appear to focus on crypto projects creating value or with some real-world use case. Shiba Inu’s moves to burn its tokens may be viewed positively, but there’s just not enough under the trunk to get excited about this token right now, and it is one of the cryptos to sell.
Dogecoin (DOGE-USD)
Dogecoin’s (DOGE-USD) lack of plans for fundamental blockchain changes has limited its upside. While Shiba Inu is advancing with Shibarium, enabling new functionalities, Dogecoin lags in non-fungible tokens (NFTs) and decentralized apps. The transition to a proof-of-stake blockchain is still uncertain despite offers of help from Ethereum’s Vitalik Buterin.
Moreover, Dogecoin’s long-term viability is uncertain. Elon Musk’s early support boosted Dogecoin (to an incredible degree). Still, like the other meme coins on this list, it lacks any meaningful investment thesis outside of its community-building abilities.
Dogecoin often relies on technical indicators for trading, offering speculative returns. Consider utility-based cryptos as better investments.
Floki Inu (FLOKI-USD)
Originally a meme-coin inspired by Elon Musk’s dog, Floki Inu (FLOKI-USD) has transformed into a comprehensive web3 project. Known as “The People’s Crypto,” Floki operates on Ethereum and Binance Smart Chain, with easy token bridging between them. A 3% tax on token trades funds the Floki Inu treasury for ecosystem development and adoption, with plans to lower the tax once enough funds accumulate, though specifics are lacking.
Floki Inu tokens have certain drawbacks to consider. Originating as a meme coin, its value remains susceptible to the influence of figures like Elon Musk. The circulating supply of Floki tokens is notably high, resulting in a meager price per token. Trading FLOKI carries a mandatory 3% tax, which can impact returns.
Beyond the Floki ecosystem, the token has limited utility and has yet to gain widespread adoption among DeFi platforms. Moreover, the anonymity of the Floki team raises concerns about accountability in case of project issues.
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.
