At the official end of 2021, cryptocurrencies have once again risen to the top of the pedestal. After starting the year with an aggregate value of $ 774 billion, the total value of over 16,000 cryptocurrencies has reached nearly $ 2.2 trillion. This is a near tripling in value for the crypto market.
What is clear from this increase is that investors are excited about the financial and non-financial applications of blockchain, the future of a potentially decentralized metaverse, and the transparency that blockchain technology brings.
But when there are over 16,000 digital currencies to choose from, there are bound to be mixed suitors. While the following four cryptocurrencies were particularly popular last year, they fall into the contender category and should be avoided like the plague in 2022.
If there’s one very simple theme I can pass on to cryptocurrency investors in 2022, it’s avoiding coins based on the Shiba Inu dog breed or named after Elon Musk. Topping the list of digital currencies to avoid like the plague is none other than Shiba inu (CRYPTO: SHIB).
Last year, Shiba Inu made historic gains. At one point in late October, SHIB tokens rose 121,000,000% in less than a year. This meant that the change in your pocket could have made people millionaires, if they had bought at midnight on January 1, 2021.
Shiba Inu’s historic gains have been driven by increased visibility in the form of more exchanges accepting SHIB for trade, the launch of ShibaSwap, the arrival of a handful of branded merchants and fear to miss (FOMO). The latter is especially important, as the hype on social media has played a role in increasing the valuations of the four digital currencies on this list.
However, Shiba Inu has three key flaws. The biggest problem is that it has no competitive advantage and offers no differentiation (social media pumping is not differentiation). It’s just an ERC-20 token built on the Ethereum blockchain that is subject to the same high transaction fees and the same processing time that can affect the Ethereum network.
Second, it lacks utility in the real world. Even with Shiba Inu consistently among the top 15 digital currencies by market cap, he still doesn’t have 400 merchants willing to accept his token, according to data from the online business directory Cryptwerk. Without a competitive advantage or differentiation, there is simply no reason for businesses to want to accept SHIB as a form of payment.
And third, history shows that life-changing gains in the crypto space are achieved by equally epic reversions. This suggests that SHIB is heading into the niche in 2022.
I repeat: don’t buy cryptocurrencies inspired by Shiba Inu or Elon Musk. that’s why Mars Dogelon (CRYPTO: ELON) (pronounced “Dog-a-lon”) is the list of digital currencies to avoid in 2022.
The first clue that you might buy into a project with no real use is in its mission statement. Although the Dogelon Mars homepage has recently been revamped, it has already been noted that Dogelon is “the first interplanetary currency”. The mission statement also alluded to the “send[ing] from tokens over time to victims of mats and scams. A “carpet” or “pull pull” describes an event in which the developers of a cryptocurrency take investors’ money and disappear.
To start with the basics, there is absolutely no need for an interplanetary currency. No human has visited another planet, let alone colonized it to the point where foreign exchange would be needed. The fact that Dogelon Mars has even been described as an “interplanetary currency” is insulting to the intelligence of the investment community.
Also, I can’t even find any information on how many companies accept Dogelon Mars as a payment method. This is a pretty good indicator that this payment coin is not used by many businesses around the world, if any. Other than a small number of crypto exchanges, its ELON token has no real use.
Let us not forget either that Dogelon Mars has already erupted and fizzled out. Over a three-week period last year (April 22 to May 11, 2021), ELON jumped over 6,200%, but ended up losing 97% of its value over the next six weeks. It’s best to avoid these illiquid, high-profile social media tokens.
In case you’ve skimmed over, I’ll say it again: don’t buy Shiba Inus or Elon Musk inspired meme pieces. This includes Floki Inu (CRYPTO: FLOKI), named after the Shiba Inu adopted by Elon Musk, Floki.
The buzz around Floki Inu seems diverted. Although FLOKI tokens skyrocket every time You’re here CEO Elon Musk tweets about Shiba Inus, Musk has absolutely nothing to do with the project. Musk’s brother, Kimbal Musk, is involved in the Million Gardens movement, which is designed to fight world hunger – and FLOKI is part of it as well. But let’s be real here: Investors aren’t crowding in because of what Kimbal Musk thinks or tweets.
Another issue with Floki Inu (and the other pieces on this list) is its lack of real-world utility. The FLOKI white paper notes a partnership with CryptoCart, which allows FLOKI holders to spend their tokens in around 1,700 stores. The problem is, there are over 500 million entrepreneurs in the world, which means 1,700 stores are a fraction of a fraction in the grand scheme of utility.
To build on this, most companies are unwilling to take FLOKI. The deals made by many of these obscure coins allow third-party vendors to exchange a coin, like FLOKI, for whatever currency a company is willing to accept, like the US dollar, for a fee. There are not 1,700 companies in the world with signs on their doors indicating that they will take Floki Inu as a means of payment.
Floki Inu’s aggressive advertising campaign in the UK has also raised concerns. The regulations surrounding crypto advertising are constantly evolving and Floki Inu could attract the attention of UK lawmakers.
Long story short, it’s a token that can easily be avoided in 2022.
The fourth and final cryptocurrency to avoid like the plague this year is Dogecoin (CRYPTO: DOGE). And yes, the two developers of Dogecoin were inspired by the Shiba Inu dog breed. Stop buying Shiba Inu themed coins!
Unlike Floki Inu, Dogelon Mars, and Shiba Inu, who all snapped off Elon Musk’s backhanded tweets, Dogecoin has a connection to the richest person in the world. Elon Musk only owns three digital currencies, including Dogecoin. He also previously tweeted that he was working with the developers of Dogecoin to improve the network. This gave Dogecoin just a hair’s breadth more credibility in its progression than the other three tokens.
However, Dogecoin, like the other cryptocurrencies listed here, is completely devoid of any competitive advantages or differentiation. Although its transaction fees are lower than those of Bitcoin and Ethereum, Dogecoin’s fees are also consistently much higher than virtually any other popular payment coin.
In addition, the Dogecoin blockchain is not particularly fast, offers no mind-blowing scalability, and in September the average number of transactions carried out daily fell to its lowest level in three years (around 20,000 per day). ). Payment giant Visa is able to process what Dogecoin has processed per day on its blockchain in just one second.
In addition, to stay on topic, very few companies are ready to accept DOGE as a payment method. Cryptwerk lists less than 2,000 merchants worldwide as accepting it. While that’s five times higher than SHIB, it’s an embarrassing number eight years after its debut.
Dogecoin, like Shiba Inu, Dogelon Mars, and Floki Inu, all risk losing most of their value in 2022.
This article represents the opinion of the author, who may disagree with the âofficialâ recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.