In the crypto sector, utility is of paramount importance. Meme-based cryptos, reliant solely on clout, are mostly bound for entire failure. Despite their enviable current market presence, non-utilitarian cryptocurrencies face a downward trajectory. Indeed, without genuine use cases, there’s not really an underlying investment thesis long-term investors can get behind.
The crypto market now largely prioritizes strong fundamentals over speculation, prompting a strategic removal of weaker assets for portfolio strength. Mega-cap cryptocurrencies have outperformed this year, highlighting a growing performance gap. Thus, it’s clear investors aim to navigate market unpredictability and avoid potential downturns. And that means avoiding speculative cryptos at the higher end of the risk curve.
The discussed cryptos below show no meaningful signs of real-world utility, putting them on this list of cryptos to avoid heading into the holiday season.
4-Chan (4CHAN-USD)
I’ve said this before and I’ll say it again. Investing in hype-driven meme tokens is a dangerous idea. And one good crypto example is 4-Chan (4CHAN–USD).
The 4-Chan Token, once popular, swiftly declined following an early June surge. Introduced in May with a 100 trillion token supply, its market cap remains unknown. Despite initial promise, 4CHAN faced volatility, notably after early investors sold off, causing a significant price drop since mid-June.
4-CHAN, plagued by continued inflation and a lack of supply control is especially weak in governance and vulnerable to manipulation by its creator. These issues deter conservative investors, as the risks far outweigh potential rewards, making it an undesirable asset.
Its future relies on factors like viral recognition or endorsements, with concerns about high inflation and susceptibility to manipulation. Conservative investors avoid it due to perceived risks outweighing rewards.
Shiba Inu (SHIB-USD)
Shiba Inu (SHIB-USD), a popular memecoin, recently experienced a remarkable 20,000% surge in burn rate, eliminating over 260 million tokens in 24 hours—setting a two-month record. Despite this, SHIB’s price remains unchanged, down 5% over the past week, amidst its ongoing scarcity strategy.
However, Shifting investor preferences toward cryptocurrencies with tangible value pose uncertainty for Shiba Inu. Despite notable token-burning efforts, the lack of key features hampers sustained interest. This year, SHIB recorded a 20.7% decline over a nine month period, signaling growing skepticism about its long-term viability.
While past surges occurred, the trend has been predominantly downward since late 2021, making a repeat scenario increasingly unlikely and the token’s future uncertain.
Pepe Coin (PEPE-USD)
The final cryptocurrency on this list, Pepe (PEPE-USD), may be challenging to argue against as an impractical investment, but here it goes. Launched in late April, this cartoon frog meme coin experienced an initial spike followed by a consistent decline in prices.
Initially hitting a $1.8 billion market cap during hype, Pepe now sits at $267 million, offering no utility, deemed purely speculative and high risk. Its decline accelerates, with Anarchy (ANA-USD) replacing Pepe Coin in the crypto spotlight. Raising over $3 million, Anarchy gains momentum since its June presale.
Despite the lack of utility beyond serving as a gambling mechanism, PEPE saw more than doubling in prices twice during its ongoing downturn, notably in late June and late October. Thus, like the other names on this list, these meme tokens can pop from time to time. I just don’t think they’re worth the risk right now.
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.
