Meme coins have had an intense 2023, with many highly-speculative digital assets seeing multi-year highs. Notably, many crypto fans still think this momentum can continue well into 2024. While that’s certainly the case, it’s also true that many of these volatile assets have seen massive price declines in the past.
It’s my view that meme tokens aren’t really worth most investors’ time. Speculation based on price action, observing charts, or reading tea leaves really isn’t conducive to doing fundamental analysis on a project that generates cash flows or creates real-world utility for end users. These projects don’t fit into that bucket.
Accordingly, here are three top tokens I need to pound the table on in the negative. At some point, a downturn in the crypto market will materialize. These tokens are likely to lead the way lower.
Dogecoin (DOGE-USD)
I have been discussing Dogecoin (DOGE-USD) a lot recently, particularly when it comes to cryptos to avoid. That’s a stance that hasn’t changed, and I don’t think it will anytime soon.
Indeed, while there has been some development within the Dogecoin ecosystem, this isn’t a project that’s utility-based. Rather, it derives the vast majority of its value from its core community. And speculators and traders play hype-driven rallies.
The most recent rally took place as a result of the launch of an Xpayments account on social media platform X. Like other hype-driven rallies spurred by X owner Elon Musk, this one eventually gave way to selling pressure. And DOGE gave up most of its gains in short order.
Yes, this is a project with some celebrity endorsements and a strong community. However, those aren’t fundamental reasons for investors to consider owning this asset.
Shiba Inu (SHIB-USD)
The core thesis for Dogecoin is similar to the one I have for Shiba Inu (SHIB-USD). This meme token project was created essentially as a play on Dogecoin. With a similar Shiba Inu logo, it’s generated a similarly-impressive community as a result of its impressive rallies during previous hype cycles.
Since the hype cycle has cooled, Shiba Inu has given up a significant chunk of its gains. Those who bought at or near the top most likely have seen massive losses, despite the best efforts of Shiba Inu’s team to improve its fundamentals.
A highly-inflationary token, Shiba Inu has begun an aggressive token burning campaign. As many as 12 million Shiba Inu tokens were burned on January 25, for example, in a bid to reduce circulating supply and boost this token’s price.
Overall, I’m not sure such moves will be enough to counter selling pressure, in the event of a market-wide decline. The Shiba Inu team does have the ability to burn many more tokens in order to help in this regard. However, when selling pressure really picks up, this is a token that’s shown the ability to move down as fast as it goes up.
Overall, Shiba Inu’s limited adoption and utility are likely going to be what hinders this token the most in the future. Only 907 businesses internationally are accepting it as a form of payment. And until there’s some sort of wide-ranging adoption seen on its blockchain by users looking to do something with these tokens, I’m going to continue to view Shiba Inu as a vehicle for speculation, nothing more.
FTX (FTT-USD)
Two years ago, crypto fans and investors witnessed the downfall of FTX (FTT-USD). Once the third-largest cryptocurrency in the market, it experienced the ripple effect that eroded public trust. Then it caused disruption to the services linked to it. Ever since, the repercussions have continued despite efforts made to recover lost funds and avert future dilemmas.
When FTX appeared in the market, it struggled with its competitors like Blockgolio and Liquid Global. Through aggressive marketing, like ads from the Super Bowl and celebrity endorsements, FTX gained attention and traction. As the crypto market boomed in 2021, FTX flourished. In fact, it drew nearly $2 billion in venture capital to the blockchain.
After the scandal exposing the wrongdoings of FTX and sister company Alameda Research, FTX never recovered. Additionally, many legal demands and lawsuits were filed against the company backing this project. This is a dumpster fire of a crypto to own now or at any point. FTX went bankrupt for a reason, and there’s no logic to think a revival of this project will be anything more than a dud.
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.
