Veteran Barron’s columnist Jack Hough had an interesting article about Bitcoin (BTC-USD) in March, where he discussed five ways to value the cryptocurrency. That got me thinking that if it can be done for Bitcoin, it could be done to identify other cryptos to sell.
It appears that none of the five valuation methods for Bitcoin apply effectively to other cryptocurrencies. This is in part because Bitcoin is recognized as the world’s leading crypto, while all others, including Ethereum (ETH-USD), come a distant second.
If I could only buy one cryptocurrency, despite the utility of ether in blockchain technology, Bitcoin remains the closest asset to gold in terms of its store of value, so for that I would go with BTC.
To identify the cryptos to sell, I’ll go with Hough’s second way to value Bitcoin, which is “Miner Detail,” or the cost of mining the crypto. I’ll select from a list of proof-of-work (PoW) cryptocurrencies where miners receive rewards for validating transactions. Here are my three cryptos to sell in March before they crash and burn.
Dogecoin (DOGE)
Before diving into each of the cryptos and why to sell, let’s consider the cost to mine Bitcoin relative to the profit potential. According to the site MacroMicro, the average mining cost for Bitcoin as of March 13 was $42,169, or 59.5% of Bitcoin’s current price of $70,835, at the time of writing.
I last wrote about Dogecoin (DOGE-USD) for InvestorPlace in Feb. 2022. The cryptocurrency had fallen from the top 10 by market capitalization to approximately $22 billion. According to CoinMarketCap.com, it’s now back in the top 10 with a $24.8 billion market cap, 13% higher over 25 months.
Until this year’s crypto thaw, DOGE was in negative territory over the past two years, while Bitcoin was up slightly through Dec. 31. I finished my article by suggesting Dogecoin’s finest hour may have been its May 2021 all-time high of around 69 cents.
Based on Coinwarz.com’s Dogecoin mining rewards forecast, the estimated annual profit per DOGE is just under 10 cents, suggesting the cost to mine is approximately 44% of its current price of $0.1741.
Although the percentage is less than that of Bitcoin, there is no question that its lack of utility positions it as an inferior crypto. Up 88% year-to-date, the halving should act as a cold shower on its future price.
Shiba Inu (SHIB)
Dogecoin is the largest of the meme coins by market cap. Shiba Inu (SHIB-USD) is the second largest at $18.8 billion. It falls off substantially after that.
Whether we’re talking about meme coins or meme stocks, I’m not a fan. At least with the latter, there are fundamentals to support your fanaticism. With Shiba Inu, it became the next “Dogecoin” in 2020.
It’s probably best known because the Ethereum co-founder donated $1 billion of SHIB to charity in May 2021. Shiba Inu’s creators had gifted him the tokens. The timing couldn’t have been better. In May 2021, the coin’s price hit $0.00003043. Except for the Nov. 2021 surge, its price traded below that level until March 4, 2024.
As my InvestorPlace colleague Josh Enomoto said in early March, the attraction of SHIB for many crypto speculators is its small price. At $0.00003242, to equal 1 Bitcoin, you’d have to get another 2.2 billion Shiba Inu coins to reach $72,000.
Therefore, doubling its price would bring it to $0.00006484. To get over $1, it would have to double 14 more times. That’s a lot of appreciation.
However, it can’t technically be mined because SHIB is a proof-of-stake (PoS) crypto. You would have to join a mining pool such as unMineable, mine other cryptos, and then convert them into Shiba Inu.
That just sounds way too exhausting.
MAGA (TRUMP)
I just had to include MAGA (TRUMP-USD) in my list of three cryptos to sell in March despite being a PoS crypto. Created by Steven Steele, the meme coin has gained traction in recent weeks as Donald Trump worked to secure the Republican Party’s nomination, running for President in November.
“My intention is really to have this up there with a DOGE or SHIB, that kind of scale and market cap and popularity,” Fortune reported Steele’s comments.
If Dogecoin is dumb, and Shiba Inu is dumber, then MAGA is the dumbest.
Of course, like everything else Trump-related, his supporters have little concept of reality. This is why whenever there’s a Trump event, the price of TRUMP seems to move higher. While it’s not based on fundamentals, perhaps there’s some logic in speculating on it.
After all, if your prime objective is to make lots of money quickly, MAGA appears to do that. As I write this, its value has risen 170% over the past month.
I think it’s fair to say the silly season in crypto has begun. TRUMP, or MAGA, or whatever you want to call it, is prime evidence of this fact.
On the date of publication, Will Ashworth 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.
