Cryptocurrencies have a colorful history of hype and hysteria, from the tulip mania in 1637 to the dotcom bubble of the early 2000s. Today, the spectacle of wild speculation manifests in digital currencies, where a single unit can cost a year’s salary. While crypto trading can be a boon for some, the lack of solid fundamentals urges investors to scrutinize their portfolios and identify cryptos to divest.
Though crypto investments promise sky-high returns, the higher rewards come with equally heightened risks. As market cycles hit their apex and profits are pocketed, savvy investors know it’s time to cull their holdings and bid adieu to certain cryptocurrencies. Here are three coins that are eagerly waiting in the wings for their April Fool’s moment.
Bitcoin (BTC)
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None can dispute that Bitcoin (BTC-USD) reigns supreme as the pioneer of cryptocurrencies, often setting the tone for market behavior. However, even this monolithic titan has found itself on the chopping block in this list of cryptos to shed.
The impending Bitcoin halving event has dominated the headlines, with prognosticators heralding it as a beacon for further growth. Recent weeks witnessed BTC’s prices soaring to stratospheric levels. Yet confusion abounds, with queries emerging whether halving equates to a stock reverse split. Let’s set the record straight: halving merely impacts the creation of new BTC from mining, not the amalgamation of existing coins. The next halving, slated for April, will slash mining rewards from 6.25 to 3.125 BTC.
With reduced BTC supply in this cycle, demand could upsurge, driving prices as seen in past halving events. Nonetheless, market movements indicate that investors may have pre-empted this event, leading to massive profit-taking. The recent plummet from $69,000 to $59,000 and subsequent recovery to a new high above $73,000, then back to $66,000, paints a volatile picture. While BTC historically bounces back after corrections, the lofty valuations place investors at risk of a hefty downturn, leaving them stranded until the next upswing.
Binance Coin (BNB)
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Binance Coin (BNB-USD), the crown jewel of Binance’s digital realm, now faces ominous clouds as legal battles loom over its parent company, marking it as a prime candidate for expulsion from investors’ crypto coffers.
Binance incentivizes BNB use for platform transactions, showering investors with perks such as reduced fees and enhanced trading avenues. Nevertheless, the company’s outlook is murky, hinging on the resolution of legal woes that may seal BNB’s fate. Former CEO Changpeng Zhao’s guilty plea for breaching U.S. anti-money laundering laws catalyzed a hefty $1.8 billion fine against Binance, alongside a $2.5 billion asset forfeiture.
Prior to this legal maelstrom, doubts surfaced over Binance’s capacity to settle these penalties without encroaching on user funds. The unfolding narrative ominously echoes the demise of FTX, a defunct exchange that succumbed to liquidity woes and malfeasance by ex-CEO Sam Bankman-Fried.
While BNB’s recent surge above $600 may suggest a resurgence akin to its pandemic-era zenith, the cryptocurrency market dances to the tune of speculation. Correlations with BTC’s trajectory underscore that Binance’s future is precarious. Intensive scrutiny may propel prices off the cliff if U.S. regulators unearth further misconduct, ushering Binance towards financial ruin.
Dogecoin (DOGE)
The Rise and Fall of Dogecoin: A Meme Dream Turned Nightmare
Meme Mania: A Short-Lived Craze
Despite the allure of meme coins, like Dogecoin, they are more suited for quick wins rather than lasting investments. Dogecoin, touted as the pioneer of meme coins, has now plummeted to a fraction of its recent peak value in the volatile world of cryptocurrencies.
Downfall of DOGE: Inherent Flaws Revealed
Unlike more stable cryptocurrencies such as Bitcoin, Dogecoin lacks critical elements for sustained growth. With no set limit on its circulation and scarcity measures, Dogecoin falters under the weight of its reliance on fleeting popularity to drive its value. In the realm of digital assets, where intrinsic value is scarce, coins like DOGE teeter on the edge of obscurity, subject to the ever-shifting winds of internet trends.
From Meme Magic to Market Meltdown
The meteoric ascent of Dogecoin owes much to the whims of online culture, propelled by viral memes and endorsements from high-profile figures like Elon Musk. However, the euphoria may be short-lived, as Musk’s past alleged market manipulation and insider trading accusations have tarnished the once-bright prospects of meme coins like DOGE.
The Fading Glory of Dogecoin
While Dogecoin once rode the wave of hype, inspiring countless “to the moon” memes and securing a spot among the top cryptocurrencies by market capitalization, its current outlook paints a starkly different picture. Today, it finds itself more aptly categorized among the “cryptos to sell,” signaling a fall from grace in the volatile crypto landscape.
On the date of publication, Rick Orford 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.
