As the crypto market catches its breath, the time has come to evaluate which meme coins warrant an exit strategy.
In an environment where a rising tide lifts all boats, Bitcoin’s (BTC-USD) robust surge in the early months of the year propelled meme coins along for the ride. Meme coins, known for being built on social media hype rather than real-world utility or technological fundamentals, have seen a significant slowdown in market inflows recently. This deceleration is expected to exert considerable pressure on meme coins, prompting investors to consider divesting from these highly speculative assets. Here are three candidates that may be due for removal from your portfolio.
Meme Coins to Say Goodbye To: Bonk (BONK-USD)
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Bonk (BONK-USD) briefly kindled hopes of a crypto bull run in the midst of a brutal market downturn in 2022. Surging to six cents from merely a fraction of a cent within a short span, Bonk has now retraced by 100%, trading at a minuscule fraction of its peak value. This roller-coaster ride exemplifies the crypto market’s susceptibility to sudden speculative surges driven by meme tokens lacking real-world use cases.
Bonk’s price spikes, including the notable rebound in 2020, were largely fueled by viral TikTok videos rather than any intrinsic project merits. Additionally, its speculative nature and infinite supply model raise significant doubts about its long-term sustainability, rendering it a digital asset to steer clear of.
Pepecoin (PEPE-USD)
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Pepecoin (PEPE-USD), adorned with a cartoon frog motif, has been a standout performer in the crypto sphere, boasting a staggering 15,000% year-over-year growth. The coin witnessed a colossal $3.50 billion surge in trading volume in a single day, largely fueled by retail investors chasing speculative assets. The frenzy surrounding Pepecoin underscores the risks associated with investing in meme tokens, which lack fundamental stability. Like its counterparts, Pepecoin thrives on viral trends rather than tangible value, making it a precarious asset in times of market downturns.
A recent blockbuster transaction involving the transfer of 2.6 trillion PEPE tokens to an undisclosed wallet holding over $21 million raised eyebrows among crypto enthusiasts. This move followed a sharp price decline, attributed to major stakeholders stepping in to manipulate the coin’s value. Such volatility serves as a stark reminder of the fragile nature of Pepecoin, highly sensitive to online trends and investor sentiments.
Shiba Inu (SHIB-USD)
The Folly of Shiba Inu: A Meme Coin Amidst the Storm of Cryptocurrency
Celebrity Mirage: The Musk Effect on Shiba Inu
Shiba Inu (SHIB-USD), often deemed the whimsical relative to Dogecoin (DOGE-USD), stands as a prominent meme coin that investors may want to steer clear of. Despite its popularity among crypto enthusiasts, Shiba lacks intrinsic value and functional purpose, relying solely on its charm to attract a fervent online following. The coin has experienced notable price hikes during hype cycles, only to spiral back down shortly after, exemplifying the unpredictable nature of speculative crypto investments.
A False Beacon: Celebrity Endorsements and Shiba Inu’s Downfall
Contrary to conventional investments backed by solid technology or utility, Shiba Inu owes its fleeting success largely to celebrity endorsements, notably from tech mogul Elon Musk. Musk’s Twitter musings have wielded significant influence over meme coins like DOGE and SHIB, positioning them as trendy, populist investments. The latest buzz surrounding SHIB erupted when Musk cheekily incorporated the Shiba Inu image into his Twitter profile.
The Harsh Reality: Speculation Over Sustainability
For supporters of Shiba Inu, the harsh truth remains that these cryptocurrencies offer little real-world value compared to more established players in the market. With their inherent flaws left unaddressed, meme coins like Shiba Inu will likely persist as speculative assets, while more robust and sustainable cryptocurrencies gain ground within the industry.
As of the publication date, Muslim Farooque held no positions in the securities discussed. The opinions conveyed in this article reflect those of the author and adhere to the InvestorPlace.com Publishing Guidelines.
