The crypto market is seeing signs of life everywhere. Bitcoin (BTC-USD) is once again trading above the $70,000 level, and everything from Web3 to DeFi to meme token projects are surging. That’s raised some eyebrows, but it’s also driven some nice profitability to traders and speculators betting on such assets.
Of course, the key question is whether this momentum can continue. Crypto trading is something I don’t fully understand, as these assets are very difficult to value on a fundamental basis. However, it’s also true that many investors are making loads of money, so it’s important to address these moves.
I’m going to focus on three meme token projects I think aren’t worth owning right now. These three projects are up big off their 2022 lows, and could certainly have more room to run. But it’s the downside risk that bothers me the most with these projects.
Pepe Coin (PEPE-USD)
Frog-themed token Pepe Coin (PEPE-USD) saw high popularity in rapid price changes and increase. It hit its all-time high on May 15, and its current market cap is now at $5 billion.
Pepe Coin surged remarkably over the past year, boasting over 15,000% growth. A single-day trading volume spike of $3.50 billion highlighted speculative fervor among retail investors. However, Pepe Coin’s reliance on fleeting trends underscores the risks associated with meme tokens amid market downturns.
Despite initial hype and value surges, Pepe Coin faced setbacks, including allegations of insider trading and security breaches. An incident involving stolen funds and competition from new meme coins added to its challenges.
Shiba Inu (SHIB-USD)
With a 186% surge, Shiba Inu (SHIB-USD) currently sits 12th place in the major crypto list. However, unlike Ethereum’s upcoming “Pectra” update or Bitcoin’s established use cases, SHIB lacks a clear development roadmap. The team initiated “Shibdentity,” enhancing Web 3.0 user discovery to address this. Collaborating with Zama, they’re developing a privacy-focused network to bolster Shibarium, providing added security for SHIB token holders.
SHIB struggled with inflation from its massive initial supply despite efforts to burn and reduce circulating tokens. Price volatility peaked in 2021-2022, but SHIB hasn’t regained those highs in the current downturn, falling from $0.000035 in March to $0.000021. Declining whale activity compounded concerns.
Dogecoin (DOGE-USD)
After a steady climb, Dogecoin (DOGE-USD) encountered resistance around $0.160. It peaked at $0.1594 before initiating a downward correction akin to Bitcoin and Ethereum. Dropping below $0.1540, it bottomed at $0.1488 and is now consolidating. DOGE remains above $0.150, supported by a bullish trend line.
Originally introduced as a playful alternative to Bitcoin in 2013, it now ranks 8th among top cryptocurrencies by market value, boasting a $20 billion cap. Despite its robust community backing, Dogecoin’s utility needs to catch up with competitors who are raising concerns about its sustainability.
While leveraging Dogecoin for stable transactions could enhance its viability, its long-term prospects remain uncertain. Unlike utility-driven cryptos, Dogecoin’s recent decline in OI-weighted funding rate amid whale-induced liquidations underscores investor apprehension.
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.
