3 Most Concerning Cryptos To Watch in August
Whether you’re a cryptocurrency bull or think that most cryptos will eventually fall to zero, there’s no denying that the asset class is newsworthy. For every dramatic, well-publicized high, like Shiba Inu’s breathtaking 49 million percent gain in 2021, there has been a terrible collapse, like Luna’s plunge to $0 from a high of over $100.
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And while the crypto market has generally always been able to climb higher from a major selloff, the absolute destruction the market has endured in 2022 may be irrecoverable, according to some analysts. In the midst of this wreckage, which has seen Bitcoin fall by about two-thirds in the first half of 2022 alone, it pays to tread cautiously.
Here are three cryptos experts are warning investors to avoid the rest of the year, even though they have already fallen dramatically in price.
- Price as of Aug. 3, 2022: $0.068
Dogecoin was always meant to be a joke, and in spite of the hype that pushed it to rather incredulous highs, it seems like the coin is finally following its destiny. For seemingly no other reason than its cute namesake, Dogecoin raced to an all-time high of $0.74 in 2021 before cratering to its current price of under $0.07.
But losses may continue. Not only does Dogecoin not perform any unique function in the world of crypto and the blockchain, there is no cap on its production. Currently, more than 10,000 Dogecoins are minted every single second, meaning supply is likely to always outpace demand. Although basic economic principles can be temporarily overridden by emotion and irrational behavior, over the long run, the laws of supply and demand win out.
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Bitcoin Cash (BCH)
- Price as of Aug. 3, 2022: $140.32
Bitcoin Cash was meant to solve some of the problems that were structurally inherent to its big brother, Bitcoin — namely, speed and cost. As first developed, Bitcoin’s transaction fees were high, and its transaction speed soon became very slow compared with its competitors.
But in recent years, Bitcoin has adopted the Lightning Network, which, in the simplest terms, essentially negates any advantage that Bitcoin Cash may have once had. Investors have already pummeled the crypto, which fell from a stratospheric all-time high of $4,355.62 to below $100 before bouncing back slightly. Trading from here on out is likely to be driven primarily by speculation.
- Price as of Aug. 3, 2022: $0.00001202
Shiba Inu made a lot of speculators wealthy in 2021, with its astronomical multi-million percentage gain. But for those who held on to the crypto hoping for even further gains — or those who bought in to all of the hype — 2022 has been an unmitigated disaster. Year-to-date, the coin is down over 64%, but that doesn’t even tell the whole story.
From its all-time high in 2021, Shiba Inu is down a crushing 86.5%. Much like Dogecoin, there really is no utility for Shiba Inu in the crypto/blockchain world. The coin stands as a monument to how an illiquid, much-hyped asset can shoot up in price before coming crashing down as sentiment evaporates. Speculators still dip their toe into Shiba Inu, hoping for another miraculous price surge. The coin’s ultra-low price of fractions of a penny no doubt draws other investors thinking that they “can’t lose” when something is so inexpensive.
However, as those who bought near the coin’s highs can tell you, no matter what price you pay for something, you can always lose up to 100% of your investment. Shiba Inu should be avoided by all but the most rabid of speculators.
The Bottom Line
Cryptocurrency in general, in spite of its growing adoption, still remains a speculative investment. Within this asset class, there are certain coins that do provide a functional use, but there are many that are driven completely by hopes and dreams, with nothing tangible to give them intrinsic value.
These are the types of coins that should be avoided by any type of long-term investor, and even speculators should fully understand what they’re up against before they take the plunge. Regardless of whether you’re looking at the three cryptos listed above or any others, be sure to do your due diligence and make sure that they line up with your risk tolerance.
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