Some of the most popular digital currencies in the world could lose much of their value this year. The call to avoid these 5 altcoins has arrived.
Shiba Inu, the first of 5 altcoins
The first cryptocurrency to avoid at all costs in the new year is arguably the hottest digital currency of 2021: the meme coin Shiba Inu (SHIB 0.77%). Between midnight on January 1, 2021, and the intraday peak of October 27 of the same year, SHIB tokens rallied more than 121,000,000%. In other words, if you invested $1 in a Shiba Inu as soon as 2021 starts, you’re a millionaire in less than 10 months. By the end of the year, SHIB coins had closed about 46,000,000% higher. But 2022 was a different story for this retail investment hero. At some points throughout the year, the SHIB has retraced more than 90% from its all-time high of $0.00008841. Probably 2023 will bring the same thing. The biggest problem for the Shiba Inu is that it lacks anything resembling a competitive advantage or differentiation. cryptocoin.comAs we mentioned earlier, SHIB is an ERC-20 cryptocurrency built on the Ethereum blockchain.
Theoretically, there are countless digital currencies that can be used for payments. For starters, it’s not even a popular payment option, as the number of traders accepting this altcoin lingered in the mid-600s for most of 2022, according to data from online business directory Cryptwerk. It’s not uncommon for payouts to return more than 99% over a two-year period after a massive win. Suspicion is that SHIB is still far from reaching the bottom.
Terra Classic and TerraClassicUSD
The second and third cryptocurrencies to avoid in 2023 are the digital currency Terra Classic (LUNC), once known as Terra, and TerraClassicUSD (USTC), formerly known as TerraUSD. Before May 2022, these two cryptocurrencies seemed revolutionary and certain. TerraClassicUSD was a stablecoin that offered up to 20% yield pegged to the US dollar. Meanwhile, Terra Classic, the native token of TerraClassicUSD, was minted or burned based on an algorithm that would help TerraClassicUSD keep its peg. Over $2 billion in stakes were removed from this altcoin in early May, which resulted in the dissolution of TerraClassicUSD and the minting of trillions of Terra Classic tokens. In a matter of days, more than $60 billion in market capitalization was lost, making a seemingly definitive money machine smoke for cryptocurrency farmers.
The TerraClassic community continues to generate social media buzz based on the idea that brokerages listing LUNC will impose a burn tax that will reduce the maximum supply of close to 6.9 trillion tokens. But even burning billions of cryptocurrencies will not have an impact on such a large maximum token supply. The bigger problem is that TerraClassicUSD is not pegged and the native cryptocurrency Terra Classic no longer serves any purpose. Now that all blockchain work revolves around the new Terra, Terra Classic and TerraClassicUSD are front investments with nothing to support their value.
The fourth cryptocurrency to avoid in the new year is the FTX Token (FTT), the native token of the FTX crypto exchange. FTX officially filed for bankruptcy on November 11, 2022. FTX CEO Sam Bankman-Fried appears to have failed completely in his fiduciary responsibilities as his company has too few liquid assets to meet its obligations. Bankman-Fried was arrested three weeks ago and is facing a series of charges in the US.
The key is that the FTX token, similar to Terra Classic and TerraClassicUSD, no longer serves any purpose. FTX has gone bankrupt, and while the company is expected to spend who knows how much time it has to heal its more than 1 million creditors, the FTX token has nothing tangible to support its value. While social media buzz may support small bursts here and there, it is expected to eventually move towards $0 given that the purpose and support of the FTX token is now gone.
The fifth and final cryptocurrency to avoid like the plague in 2023 is the other ultra-popular Shiba Inu dog-themed meme coin Dogecoin (DOGE) in 2021. Dogecoin’s popularity is primarily due to its relationship with Tesla and Twitter CEO Elon Musk. The former richest person in the world owns only three digital currencies, one of which is Dogecoin. But Dogecoin is nothing but a payment coin like the Shiba Inu. It offers nothing in terms of competitive advantages, which means it has no way of standing out compared to countless other blockchain-focused payment projects.
To put this in context, payments kingpin Visa can process up to 24,000 transactions per second using its traditional network. This means that what Dogecoin’s blockchain does in a full day, Visa does in one second. Finally, DOGE falls into the same category as SHIB when it comes to payout coins that are drenched after life-changing earnings. While it has dropped nearly 90% from its all-time high in May 2021, the lack of tangible catalysts could easily and significantly lower this popular cryptocurrency in 2023.