As the crypto market continues to evolve, it’s essential to stay on top of potential pitfalls, particularly those digital assets that may be poised for a downfall. Despite positive events such as Bitcoin’s recent halving and the potential approval of Ethereum ETFs, certain cryptos may be in for a tough ride ahead.
Bitcoin, perceived as the indicator of the industry’s health, only saw a 15% increase over a two-week period following its halving on April 19. For Bitcoin to reach the ambitious $1 million target projected by Blockstream’s CSO and Pixelmatic’s CEO, Samson Mow, for 2024, the road ahead seems demanding.
“The recent split of Bitcoin could increase stress on miners as the halving cut miner rewards to 3.125 bitcoins from 6.25, prompting a selloff of holdings, putting downward pressure on BTC,” warn analysts at Kaiko. In addition, regulatory pressure, especially from significant bodies like the SEC, imposes a challenging backdrop.
In this climate, three cryptocurrencies emerge as potential ones to sell. First, meme coins that lack clear utility or a development roadmap, like Shiba Inu (SHIB-USD), despite its impressive 186% rise in the past year. However, it lacks Ethereum’s development plans or Bitcoin’s solid use case.
In an attempt to enhance its appeal, the Shiba Inu team is currently focusing on “Shibdentity,” a decentralized identity project to streamline user discoverability on Web 3.0. Additionally, they’re working with Zama, a security tools provider, to create a privacy-focused network that will grant additional protection to SHIB token holders.
However, questions about Shiba Inu’s practical utility persist, particularly when compared to Ripple’s remittance industry solutions, projected to grow from $150.8 billion in 2024 to $181.6 billion by 2028.
Shiba Inu’s focus on privacy, despite amassing $12 million for related blockchain projects, may also invite regulatory scrutiny. This was evident when Binance recently delisted privacy-focused coin Monero, reflecting regulators’ growing discomfort with anonymous transactions.
Second on the sell list is ApeCoin (APE-USD), a governance token in the NFT-linked APE ecosystem. Despite a recent listing boost from Binance Japan, the dwindling NFT market (from $26.3 billion in 2022 to $11.8 billion in 2023 according to CoinGecko) is likely to endanger ApeCoin’s stability.
Given the NFT market’s poor performance, websites have been set up to aid NFT owners in offloading their devalued assets. In such a scenario, ApeCoin’s future appears bleak without regular upgrades that extend beyond its current staking use case.
Thirdly, Bitcoin Gold (BTG-USD) presents a questionable investment. While its aims to decentralize mining by shifting from SHA-256 to Equihash is appealing, the close correlation with Bitcoin might be more detrimental than beneficial.
Indeed, while Bitcoin’s price has grown by 145% over the past year, and Bitcoin Gold by 165%, this link may prove problematic. Bitcoin has leverage from significant events like the fourth halving and the approval of Bitcoin ETFs in January – not necessarily shared by Bitcoin Gold.
The scenario mirrors Ethereum Classic’s relationship with Ethereum. Still, the potential approval of Ethereum ETFs and post-split circumstances argue for directly investing in Bitcoin and Ethereum, not similar but ultimately distinct assets like Bitcoin Gold.
Remember, as an investor, it’s essential to stay informed and make smart decisions based on credible analysis and timely market trends.
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