3 cryptos to sell before they become an April Fool’s joke

Financial bubbles are nothing new. From that Tulip mania From 1637 to the dot-com crash of the early 2000s, the investing masses have repeatedly shown that they can be vulnerable to excessive speculation despite a clear and obvious lack of fundamentals in the financial instruments they choose. Today we have gone from buying tulip bulbs that cost ten times the annual income of a skilled craftsman to spending a year’s salary on a single unit of unbacked digital currency. While some people have benefited from crypto trading, it lacks the basis for long-term investing, leading investors to analyze the cryptos to sell.

Yes, crypto offers high-yield investment opportunities – including 1,000 percent gains over short periods of time – for those willing to take relatively higher risks. However, when market cycles peak and other people pocket their profits, there comes a time when smart investors need to clean up their portfolio so cryptos can be sold.

So here are three coins you should consider selling.

Bitcoin (BTC)

As the granddaddy of all cryptocurrencies and a general barometer for the rest of the market Bitcoin (BTC USD) has secured a top spot in the hearts of many crypto investors. Unfortunately, it has also secured the top spot in this list of cryptocurrencies to sell.

Many investors may have heard about the upcoming Bitcoin halving. This fundamental process has been touted as a catalyst for further growth, and indeed BTC prices have risen to new highs in recent weeks.

However, many investors may have misunderstood the event. I’ve seen questions online about whether the halving is the same as a stock consolidation (or reverse splits) in traditional stocks. For clarity, the halving only affects the production of new BTC from mining and does not combine existing coins. The next halving will take place in April this year, which will reduce mining rewards to between 6.25 and 3,125 BTC.

Common sense suggests that reduced BTC production over the next four years could increase demand and prices, which was the case during previous halvings. However, BTC’s price action suggests that investors have already priced in this event. In fact, there has already been massive profit-taking. On March 5, the price of BTC fell from $69,000 to $59,000 in a matter of hours. While it climbed back to its new all-time high of over $73,000, it fell to $66,000.

To be fair, the price of BTC has always remained above that of previous years after each price correction. It also performs better than 90% of coins available today. However, with prices so high, there is a risk that investors will remain on guard after the inevitable correction – and then have to wait for the next bull market in a few years to break even.

Binance Coin (BNB)

Binance coin (BNB-USD), the native coin of popular exchange Binance, is facing headwinds as allegations and lawsuits mount against its parent company, making it a prime candidate to become one of many crypto stocks for sale.

For comparison, Binance recommends using BNB for transaction fees on its platform and offers investors incentives such as reduced fees and expanded trading and conversion options. However, things are not looking great for the company, which will ultimately decide the fate of BNB. Former CEO Changpeng Zhao pleaded guilty to violating U.S. anti-money laundering laws last year. This led to a US court approving a $1.8 billion fine and forfeiture of assets worth $2.5 billion against Binance.

Even before the verdict was announced, some analysts were questioning whether Binance could pay these fines without forgoing customer funds. This dilemma is eerily similar to the fate of FTX. This now-defunct crypto exchange company failed due to liquidity issues and mismanagement of funds, which were exacerbated (and caused) by the fraudulent activities of former CEO Sam Bankman-Fried.

A quick look at the BNB chart might show a different view, as it briefly exceeded $600 per coin a few weeks ago, reflecting its pandemic-era highs. However, we must take into account that the cryptocurrency market is heavily based on speculation and the rising prices of popular coins like BNB have historically been positively correlated with the rise of BTC. Additionally, Binance is under extensive scrutiny and prices could take a massive hit if US investigators find new problems in the company’s operations that could lead to bankruptcy.

Dogecoin (DOGE)

Meme coins are naturally better suited for short-term speculation than long-term investment. Dogecoin (DOGE-USD), supposedly the first and arguably most popular meme coin, has had its time in the spotlight and is now trading at a fraction of its 2021-2022 value.

Unfortunately, DOGE has the same problems as hundreds of other smaller crypto coins. Unlike BTC, Dogecoin does not have a fixed supply cap or anti-inflation protocols. The final nail in DOGE’s coffin is that it relies too much on popularity to drive up its price. Unlike stocks or traditional financial instruments, crypto coins like DOGE have no intrinsic value and are at the mercy of internet trends that can quickly and permanently disappear from the public consciousness.

The huge rise to fame is due to internet memes and indirect endorsements from celebrities like Elon Musk. However, Musk is unlikely to pull off the same trick as he has faced severe backlash alleged market manipulation tactics and allegations of insider trading last time.

DOGE may have spawned thousands of “To the Moon” memes back in the day and made it onto lists of top coins by market cap, but in its current state it is a more fitting inclusion on “cryptos for sale” lists.

At the time of publication, Rick Orford did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to those of InvestorPlace.com Publishing Guidelines.