In the world of crypto, utility is going to continue to reign supreme. That means meme-based cryptos that derive value from clout alone are destined to fail.
That said, meme-based cryptos have established a strong position in the cryptocurrency space. Several non-utilitarian cryptocurrencies continue to have large market capitalizations today. Ultimately, though, they will slide toward zero the longer they continue to trade without any real use. Their only hope is to develop real-world utility.
Current indications show the cryptos discussed below are no closer to having any real-world utility than they were before, so consider adding them to your cryptos to sell list this month.
Dogecoin (DOGE)
Altcoins like Dogecoin (DOGE-USD) are likely to garner a lot of attention as investors watch the price of Bitcoin (BTC-USD) and Ethereum (ETH-USD) continue to strengthen.
Remember, Bitcoin and Ethereum are the leading cryptocurrencies for good reason. Both have deep utility. So, I would caution crypto investors against believing that the current situation will be one in which rising tides lift all ships.
Instead, look at the reason Bitcoin and Ethereum are rising steadily and separate that from the case of Altcoins. Bitcoin continues to rise because of the increasing likelihood of spot-traded Bitcoin ETFs in the near future. Leading mainstream financial firms are fully on board with Bitcoin ETFs and appear likely to succeed in getting them approved by the SEC. And as we know, Bitcoin and Ethereum move in near lockstep correlation price-wise.
That’s another reason why all cryptos like Dogecoin continue to be dangerous. Investors should consider them to be qualitatively different. Investors should avoid Dogecoin because it is far from being anything of value at this point.
Shiba Inu (SHIB)
Shiba Inu (SHIB-USD) was created to be a “Dogecoin killer.” The idea actually worked for a while and drummed up demand around the altcoin in its early existence. It’s actually kind of ingenious: Create tension between proponents of two useless cryptocurrencies in order to drum up demand.
It has served to spike prices multiple times, which created profits for traders. However, Shiba Inu has continued to trend downward since late 2021, when it spiked so precipitously. Investors continue to hope the phenomenon will repeat itself. That’s not going to happen.
Instead, investors should recognize the only big winners that Shiba Inu will create with any consistency moving forward will be the whales. If you don’t have enough money to influence the price of Shiba Inu, you are simply gambling at this point. It’s likely to be a losing gamble based on the trajectory of Shiba Inu’s price over the last 2 years. If something doesn’t have utility, by definition, it is useless. That is precisely how Shiba Inu should be described.
Pepe (PEPE)
The last useless cryptocurrency on this list is Pepe (PEPE-USD). I’m sure I’ll have a difficult time trying to convince anyone it doesn’t make sense as an investment, but I will go ahead anyway.
Pepe is a cartoon frog who came to prominence after becoming a meme hit. His face is very familiar and has been co-opted by the more volatile side of cryptocurrency. Pepe itself was launched In late April and spiked.
Prices have continued to fall over, all following that initial spike in price. That said, PEPE prices have more than doubled on two occasions during that continued decline. Those jumps occurred in late June and again in late October. Again, the coin has no utility other than as a gambling mechanism.
Predicting its next run-up — if and when that occurs — is essentially impossible. PEPE is not an investment for those who believe in the long-term development of the cryptocurrency space. It is for traders who don’t care about utility and are willing to risk their capital.
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.
