After last month’s meltdown, what lies ahead for the cryptocurrency market? Coins with high utility such as Cardano (CCC:ADA-USD) and Polygon (CCC:MATIC-USD) have shown more resiliency at the expense of established coins, like Bitcoin (CCC:BTC-USD), and Ethereum (CCC:ETH-USD). And, for more speculative coins? They’ve attempted to recover as well.
But, as the dust continues to settle, their prospects may be weakening. A large factor in the run-up in these names experienced up until the correction was due to the “meme stock” community pivoting towards the digital asset class. Yet, as seen in recent days, this energy has shifted back to “meme stocks.”
Without this energy, it’s going to be tough for altcoins with lesser utility to make a comeback. Worse yet, as more of the brashest crypto bulls still “HODLING” onto their coins now realize that the boom times are over, an additional investor exodus may be around the corner.
In short, many cryptocurrencies, still down from their highs, could wind up giving up more of their 2021 gains. So which coins should you avoid to prevent further losses? These seven, a mix of “memecoins,” as well as cryptos with moderate utility levels, are some of the top names to stay away from:
- BitTorrent Token (CCC:BTT-USD)
- Dogecoin (CCC:DOGE-USD)
- Ethereum Classic (CCC:ETC-USD)
- MonaCoin (CCC:MONA-USD)
- Kishu Inu (CCC:KISHU-USD)
- Shiba Inu (CCC:SHIB-USD)
- Stellar Lumens (CCC:XLM-USD)
Speculative Cryptos: BitTorrent Token (BTT-USD)
As I put it back in May, BTT-USD is basically the “memecoin” that never caught on. Given its familiar name, and association with the popular yet controversial file sharing site, I was surprised it didn’t become the next Dogecoin.
Admittedly, it never received any sort of big boost that Dogecoin and other “memecoin” received, during their short-lived epic runs. Unlike Doge, BitTorrent Token never had a celebrity billionaire in its corner, like Elon Musk or Mark Cuban.
From January to early April, it did have a fair amount of speculative energy behind it. Prices soared more than forty-fold during that time frame. But, after topping out at prices just over a penny, for the past two or so months it’s been on a major slide, losing about 70% of its value. And, chances are, it’ll experience an additional erosion of value.
With its limited usability, it gains little from the DeFi megatrend. Add in the big loss in investor enthusiasm behind it, and this looks to be one of the speculative cryptos set to give up even more of its recent gains. That’s not to say there isn’t room for one more rally. But, barring any Musk/Cuban endorsement, or news of it making upgrades that make it more DeFi-friendly, don’t expect it to set the world on fire anytime soon.
You can’t talk about memecoins, without discussing the top doge in the space. Dogecoin may have started out as a joke. But, as you likely know full well, this year it’s made serious trading profits for those who got in before it peaked.
Yet, for those who got in too late? It hasn’t exactly been a rip-roaring good time. Especially for investors who bought in just before Elon Musk’s May 8 appearance on Saturday Night Live, when he candidly referred to the coin (which he had been touting online) as a “hustle.”
This marked the beginning of the end for its runaway rally, which took it up nearly 12,000% from January through May. Granted, the memecoin held up relatively well during the crypto market maelstrom that came about just a few weeks after the SNL appearance. Its resiliency could continue, with its trading debut on Coinbase (NASDAQ:COIN).
Yet, while it’s holding up well right now, that may not be the case a few months out, namely due to this coin’s minimal utility. Sure, if boosters like Musk do more than just talk it up, and put serious effort/money into its development, it could “level up.” But, until we see that start to play out, expect it to eventually make the trip back down towards its pre-hype price levels.
Speculative Cryptos: Ethereum Classic (ETC-USD)
ETC-USD, not to be confused with ETH-USD, has seen an increase in investor interest lately. What’s the story with Ethereum Classic? And, what’s its relationship with the more valuable coin with a similar name?
Good question. Ethereum Classic was the original native coin of the Ethereum blockchain. But, following a 2016 hacking incident, there was a schism in this crypto’s community. As a result, Ether, or ETH, split off, and the rest is history.
After a few years of middling performance, the rising tide of Ether this year rose its boat. Speculators jumped in, hoping it would see a similar run-up in value. And, until May, it did, soaring as much as 22-fold over a six month period. But, after the crash, it’s lost a substantial amount of its value, falling from a high of $176.16, down to around $59.07 today.
Some may think it’s found its floor at today’s prices. With its fair amount of DeFi functionality, this is understandable. But, with its utility still trailing behind ETH, along with the scores of altcoins vying to become “Ethereum killers,” this one could get left in the dust. That’s not to say it’s set to lose more of its value. Yet, if you’re looking for big gains on the heels of investors flocking to higher-utility coins, this may not be your best option.
MonaCoin never quite caught on among U.S.-based investors. But, as InvestorPlace’s Brenden Rearick broke it down back in April, this Japanese counterpart to Dogecoin was another memecoin name that could have broken out into the mainstream.
Unfortunately, it didn’t. As seen from its price history, MONA-USD experienced a huge run-up during the last crypto craze, in 2017. But, in 2021? So far this year, it has traded sideways (it trades for around $1.96 today) and thats with the sharp increase of inflows into digital assets.
It saw relatively lower levels of losses during the meltdown. Even so, don’t take this to mean this is a speculative crypto set to take off anytime soon. Sure, it’s been approved by regulators for transactional use in its home market; it has some degree of utility. Still, this usability is more in the novelty sense, as seen with Dogecoin in the U.S. But, it’s far from being in the running to supplant Ethereum when it comes to more sophisticated transactions.
An enterprising crypto aficionado, with enough capital and clout, could theoretically help turn this into a more substantial force in the blockchain economy. Yet, for now, expect this to remain a more arcane crypto, well-known in Japan, but largely unknown everywhere else.
Speculative Cryptos: Kishu-Inu (KISHU-USD)
The Dogecoin phenomenon fueled a frenzy for similar canine-themed tokens. The first to garner attention was Shiba Inu (more below), which debuted months before DOGE-USD became highly popular outside of crypto circles.
But, KISHU-USD? It debuted in April, when “Doge mania” was in full swing. In its first few weeks, it saw a substantial run-up in price, as speculators piled in. But on the heels of Dogecoin’s big declines, it’s cratered, falling more than 90% from its all-time high.
As seen from its website, Kishu Inu may have high ambitions. Yet, for now, future price action likely hinges on renewed interest in the more popular crypto that inspired it. Sure, if we do see a return of investor attention back to these tongue-in-cheek meme coins and tokens, this one could see a far greater rebound, given its small size and lower levels of liquidity.
On the other hand, as the overall Dogecoin meme loses momentum, don’t expect this to play out. If you’re looking for a memecoin lottery ticket, there’s no harm in throwing a few dollars into Doge wannabes such as this one. Just keep in mind its odds of becoming a major force in the blockchain space are slim-to-none.
Shiba Inu (SHIB-USD)
SHIB-USD may be best known for riding the coattails of Dogecoin. But, as I mentioned above with KISHU-USD, this token predates this year’s frenzy by several months.
Its founder (who goes by the moniker Ryoshi) may have aspirations for it becoming a “Dogecoin killer.” And with Ethereum co-founder Vitalik Buterin taking much of the outstanding coins he was gifted out of circulation, one could say increased scarcity alone could help support higher prices.
Yet, don’t bank on both these factors to help Shiba Inu bounce back, after its nearly 82% decline from its all-time high. As crypto whale Mike Novogratz put it in a recent interview, the odds are memecoins like this one will “run out of gas, and then lead down.”
Trading for a mere fraction of a penny, this too could be played as a crypto lottery ticket. That’s a gamble with low chances of paying off, but tremendous trading profits if it hits. Just like with Kishu-Inu, consider this something you only throw money into you can afford to lose. But instead of risking money (and wasting time) on this gamble, you may be better off buying some of the altcoins with more substance behind them.
Speculative Cryptos: Stellar Lumens (XLM-USD)
First off, it may be unfair to include XLM-USD in this list of speculative coins and tokens. The technology behind this coin’s blockchain (Stellar) has big potential.
Offering up a cheaper, faster way to remit money overseas, Stellar Lumens could prove to be an invaluable tool in a globalized economy. Yet, similar to Ripple’s XRP (CCC:XRP-USD), its more limited capabilities relative to more general altcoins may limit the potential of Stellar Lumens seeing a substantial increase in value over time.
The main problem? The Stellar network requires users to hold a small amount of the coin. But with the ease of using stablecoins (backed by fiat) on its network, even if this funds remittance platform becomes popular, the possible increase in demand for its native coin could be more limited than speculators believe.
After falling more than 50% since May, XLM-USD stands to continue languishing, as opposed to mounting even a partial recovery. If news of upgrades come about, this could spark a rebound. But until there are signs it’s working to compete with the scores of “Ethereum killers” trying to grab their share of the DeFi market, don’t bet big this one is headed “to the moon” as well.
On the date of publication, Thomas Niel held long positions in Bitcoin and Ethereum. He did not have (either directly or indirectly) any positions in any other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.