3 Cryptos to Sell in January

  • Put these names at the top of your list of cryptos to sell.
  • Shiba Inu (SHIB): It’s no longer top dog… if it ever was.
  • ApeCoin (APE): Its relative outperformance is unlikely to continue.
  • The Sandbox (SAND): Things aren’t playing out the way metaverse bulls had hoped.
cryptos to sell - 3 Cryptos to Sell in January

Source: Chinnapong / Shutterstock

2022 was a painful year for equity investors, but for those dabbling in cryptocurrencies, it was downright brutal. Bitcoin (CCC:BTC-USD), the most widely traded crypto and a proxy for the sector, was down around 65% for the year, marking its worst yearly performance since 2018. As we look ahead to 2023, there are a number of cryptos to sell before they fall even further.

As with the decline in stocks, rising interest rates were widely blamed for the reversal in cryptocurrencies following a banner year in 2021. The industry was also rocked by a slew of  bankruptcies, including crypto hedge fund Three Arrows Capital, crypto lender BlockFi and crypto exchange FTX.

December marked the lowest level of trading volumes on cryptocurrency exchanges since December 2020. Moreover, the Federal Reserve has signaled it is not yet finished with interest-rate hikes. Unless the risk-on trade comes roaring back, 2023 is likely to be another painful year for cryptocurrency investors.

As with any asset class, some alt coins are likely to perform better than others… and some carry more risk. With that in mind, and with more potential volatility on the horizon, here are three cryptos to sell now.

SHIB-USD Shiba Inu $0.0000081
APE-USD ApeCoin $4.01
SAND-USD The Sandbox $0.41

Shiba Inu (SHIB-USD)

A close-up shot of a Shiba Inu with a grinning face representing Dogecoin.
Source: Wollertz / Shutterstock

First up on the list of cryptos to sell is popular meme token Shiba Inu (SHIB-USD). It was once among the most aggressively traded assets in the crypto market, with traders buying in at impressive volume.

This led to SHIB’s incredible outperformance in 2021, with some lucky speculators seeing multi-million-percentage-point gains. Then the bottom fell out. In 2022 alone, SHIB lost more than three-quarters of its value. And it’s down more than 90% from its all-time high, made in October 2021.

Despite this sharp decline and the fact that Shiba Inu provides little utility outside of its community and early-stage projects, it still has a market cap of more than $4.4 billion, making it the 16th largest cryptocurrency. In other words, this meme coin has much further to fall as its popularity wanes and investors prioritize buying cryptos with real-world utility — if they buy them at all.

ApeCoin (APE-USD)

A smartphone with the Apecoin logo on top of money.
Source: mundissima / Shutterstock.com

Next on this list of cryptos to sell is prominent non-fungible-token-related crypto ApeCoin (APE-USD). Founded with the help of the Bored Ape Yacht Club (BAYC) team, which is behind popular NFT compilations such as the Bored Apes, ApeCoin shot from an initial token offering price of $1 apiece to nearly $40 before quickly reversing. Today, it’s trading around the $4 level.

The token, which is still less than a year old, is up more than 10% so far in 2023. And some investors remain bullish on its medium-term prospects. The project’s staking launch has sparked some interest, as investors are now able to stake their funds in four pools — the BAYC pool, ApeCoin pool, MAYC pool, and the Paired pool. Consequently,  the owners of ApeCoin will be able to earn passive income from it.

That said, this token has little utility outside of staking. While some have suggested that APE may be the primary currency used in various, future metaverse projects, it’s unclear just how the economics of this project will work. Further, this NFT-focused project saw interest wane as NFT volumes and prices dropped sharply in 2022.

Without any significant and convincing use cases,  investors are better off selling than buying ApeCoin at these levels.

The Sandbox (SAND-USD)

The logo for The Sandbox (SAND) on a mobile phone.
Source: Ira Lichi / Shutterstock.com

The final crypto to sell has been one of the worst performers in a terribly performing sector: The Sandbox (SAND-USD). This crypto project is among the leaders in the world of blockchain-based metaverse games, which provided a catalyst in 2021. In 2022, the token lost 93.5% of its value.

While the metaverse is certainly an interesting sector to watch, it’s hard to make the argument that it is a fast-growing one. Despite The Sandbox’s early popularity, data from DappRadar shows a sharp decline in user engagement. The number of unique active wallets interacting with The Sandbox peaked at around 4,300 a day in February 2022. Recently, DappRadar shows UAWs of less than 300 a day.

Reduced participation in The Sandbox will decrease demand for SAND, which is used for transacting within this metaverse game. Therefore, investors may want to think twice before jumping in and consider selling instead.

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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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