If you think the stock market has been on fire since the coronaviruses crash, you should look at cryptocurrencies. Over the past 20 months, the aggregate value of the digital currencies listed by CoinMarketCap.com has increased from 141 billion to 2.58 trillion.
The reality is that most of the space is filled with projects that won't lead to meaningful adoption. The following three popular cryptocurrencies should be avoided as we push into December.
Dog-based meme coins have been very popular. The image is from the same source.
Shiba Inu.
The dog-based meme coin Shiba Inu is arguably the biggest coin to avoid in December and the foreseeable future.
For the past year, Shiba Inu has been busy. Between midnight on January 1 and the close of business on October 27th, the price of the token went up more than 121,000,000%. Gains of this magnitude are not seen in under a year and could have made investors millionaires.
The rally in Shiba Inu was the result of many catalysts. The launch of decentralizing exchange ShibaSwap in July, the landing of AMC Entertainment as the first major merchant, and the fear of missing out are some of the other things. Considering that Shiba Inu is one of the most searched coins, it's no wonder that it's market value has gone up.
The fact that Shiba Inu is rife with flaws doesn't change because of the most tangible catalysts.
The real-world utility of Shiba Inu is almost completely missing. Only 373 merchants worldwide accept the payment.
The median hold time for all cryptocurrencies is higher than for SHIB, which is likely a sign that some people don't believe in the long-term project.
It doesn't offer a competitive edge. Shiba Inu is exposed to potentially high transaction fees and possible processing lag because of the built in ERC-20 token.
The biggest reason to avoid Shiba Inu is history. When I looked at the performance of a few high-flying payment coins that gained anywhere from 24,000% to 461,000% in a relatively short time frame, all of them lost most of their value in the following 12 to 26 months. I can only imagine what will happen to SHIB after it gained as much as 121,000,000% in 10 months.
The image is from the same source.
Dogelon Mars.
The Dogelon Mars is a digital currency that can be avoided like the plague in December.
Don't feel bad if you haven't heard about Dogelon Mars before. At the beginning of September, the coin was trading for about $0.000000 per ELON, and it was named after the CEO of Musk's company. Dogelon Mars had a market value of over $1 billion by October 30.
The bulk of the surge can be traced to two announcements. The rapidly rising ELON was listed by OKEx.
The more exchanges that list ELON, the better the coin's liquidity and the faster the community will grow. It's no secret that fringe coins rely on social-media buzz to bring in new investors.
Dogelon and many other coins have mission statements that are fluff. Dogelon is described as the first interplanetary currency and a project that pledges to send token over time to victims of rugs and scam. A "rug" is an event where developers abandon their project and take investors' money.
There's no need for an interplanetary coin at this time. There is nothing to suggest that Dogelon is different from the rest of the crowd. It's one of many digital currencies being pumped on social media.
Dogelon went on to lose most of its value about six weeks after peaking, after it skyrocketed more than 650% between April 22 and May 11. Dogelon Mars should be avoided at all costs because of the fleeting nature of big gains based on social-media buzz.
The image is from the same source.
Doge coin.
This month has been spent with the dogs. Dogecoin is a rival of Shiba Inu and is worth avoiding.
Dogecoin had a great year, but not one that would have made people millionaires with a $1 or $2 investment. Dogecoin has gone up by more than 4% since the beginning of the year. Increased adoption and social-media buzz have done their part, but Dogecoin's gains have really come on the back of Musk's commentary.
Dogecoin is one of the three digital currencies owned by Musk. He previously stated that he would be working with Dogecoin's developers to improve the network. Whenever the self-proclaimed "Dogefather" makes reference to the dog breed, it's taken as a sign of bullishness by the Doge coin community.
The "people's currency" is the same as the other coins to avoid in December, it lacks a competitive edge or real-world purpose.
Dogecoin's transaction fees are lower than the "Big Two," but they are also higher than most other popular payment coins. It is slower at setting transactions than a number of large payment-coin peers. Dogecoin is not likely to be the coin of choice if businesses want efficient payment options. According to the online business directory Cryptwerk, fewer than 2,000 businesses worldwide accept DOGE as payment.
It's worth noting that most of the time, Musk's tweets have no impact on Doge coin. Nothing Musk has said on the internet has had an impact on the effectiveness of the network. Dogecoin's transactions per day fell to a three-year low in September, which could be a sign that the social-media buzz surrounding this coin is dying down.
There is no reason to own DOGE.
The writer of this article may disagree with the official recommendation position of a premium advisory service. We are motley! Asking an investing thesis helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
