2 toxic cryptocurrencies for sale right now
October has been a spectacular month for same crypto-currencies as two of the market’s hottest assets hit mind-blowing levels. Shiba inu (CRYPTO: SHIB) and Dogecoin (CRYPTO: DOGE) increased by 40% and 100%, respectively, over the past 30 days. But without convincing fundamentals to justify the bull run, investors should consider taking profits before this bubble bursts.
1. Shiba Inu
Founded in August 2020 by an anonymous developer called Ryoshi, the Shiba Inu token is carefully designed to mine popular dog memes on the internet. But despite its staggering 60,000,000% increase since its inception, the coin’s lack of competitive advantages and the speculative investment community could put it in danger of a dramatic crash.
Image source: Getty Images.
Shiba Inu’s October rally has little fundamental support. According to Fortune magazine, the buying wave may have started when You’re hereElon Musk CEO tweeted a photo of his recently adopted shiba inu puppy on October 4. Later a push for the tokens to be added to Robinhood MarketThe crypto exchange has helped boost demand.
But despite the hype, Shiba Inu doesn’t add much new from a technical standpoint. It is one of more than 460,000 working ERC20 tokens on the Ethereum blockchain. And that means it will be faced with the challenges of Ethereum, such as low transaction capacity (13 per second), without having the strong brand and development team that keeps the native Ethereum (ether) token relevant. despite its technical shortcomings.
According to Coinbase exchange, Shiba Inu investors usually only hold the token for 11 days – unlike Bitcoin and the average Ethereum hold times of 83 and 80 days, respectively. This data suggests that many Shiba Inu buyers are looking for a quick turnaround instead of a long-term investment. And the token’s high turnover could accelerate its decline if market sentiment deteriorates.
Dogecoin prices have climbed 154,700% since the currency’s inception in 2013. And the once satirical asset now has a market cap of $ 40 billion. But with increasing competition from even rival coins and relatively weak fundamentals, it will struggle to keep its valuation high.
Unlike Shiba Inu, which is programmed on the Ethereum network, Dogecoin is an autonomous blockchain. Transactions are validated through a proof of work system in which miners solve math problems to mint new coins (Ethereum and Shiba Inu also use this system). But unlike newer cryptos, Dogecoin is not designed to allow users to create complex stand-alone programs called decentralized applications (dApps).
The coin is designed to be a store of value and a medium of exchange. But it is ill-suited to these roles due to its inflation and volatility.
The supply of Dogecoin currently stands at 132 billion and the number is expected to grow by 5 billion per year – forever. This will dilute the value of coins in the long run if demand does not rise to match inflation. And although the typical 55-day holding time of Dogecoin on Coinbase is significantly longer than the 14 days of Shiba Inu, the coin has a history of extreme volatility, which makes it unsuitable as a medium of exchange as it exposes traders to high currency risk.
The Biggest Fool Theory
The Biggest Fool Theory is an investment concept that suggests that you can profit by buying an overvalued asset because someone else (the biggest fool) will buy it more expensive in the future. Shiba Inu and Dogecoin fit into this paradigm because their relatively weak fundamentals don’t match their massive valuations.
And while speculation can lead to epic short-term returns, ultimately the biggest fool can be the last fool. Don’t stay holding the bag when the bubble finally bursts.
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